As reported by bb.lv, U.S. President Donald Trump, after nine months of his second term, announced the first sanctions against Russia for its aggression against Ukraine. The scale, timing, and details of the event led experts to suspect that Trump is not yet ready to open a second front in the economic war with the Kremlin, and the sanctions pursue other goals. What are they?
Before the war, the U.S. and Europe imposed sanctions in unison; however, with Trump's return to the White House, America stopped increasing economic pressure on Russia and did not support any of the European Union and United Kingdom's sanction packages, writes the BBC. Trump stated that new restrictions would jeopardize the success of his talks with Vladimir Putin about ending the war in Ukraine.
But those talks have reached an impasse, and on Wednesday, Trump said his patience had run out. He imposed sanctions on the two largest Russian oil companies — Rosneft and Lukoil — but noted that if Putin comes to his senses, the restrictions would be lifted quickly.
The sanctions will harm Russia's main export industry; however, for now, they are merely a warning shot, not a large-scale offensive, experts warn.
First, the sanctions will take effect only in a month, and during this time, Trump has the opportunity to reconsider. Second, Trump still does not support European sanctions against Russian oil and does not share the EU's determination to confiscate Russia's frozen gold and foreign currency reserves in the West. Third, he has not changed his position on arms supplies to Ukraine.
Finally, the announcement of upcoming sanctions against part of the Russian oil industry in a month has supported falling oil prices, which primarily benefits the world's largest oil producer — the United States.
So far, America — both under Joe Biden and Trump — has refrained from a total embargo on Russian oil precisely due to fears of a spike in gasoline prices and public discontent. Now the situation has changed: there is an oversupply of oil in the market, and falling prices threaten American oil producers. Sanctions against the main competitor in the oil market come at a timely moment.
However, even if the economic effect of the sanctions chosen by Trump cannot be assessed now, politically they send a crucial signal, believes Ruth Deermond, a Russia expert from King's College London.
"The announcement of sanctions is not so important in terms of its material consequences as in terms of the signal it sends. A signal that the Trump administration is finally ready to exert direct pressure on Russia," she notes.
What the Consequences Might Be
The two largest oil companies in Russia risk becoming pariahs for buyers and transporters of their oil and losing their remaining assets abroad. However, they have time to adapt to the new conditions and minimize damage.
Trump has given all counterparties of Rosneft and Lukoil until November 21 to sever ties or face secondary U.S. sanctions. However, these sanctions are not automatic, and each individual case will be reviewed by the U.S. Treasury, which noted in a press release that "the ultimate goal of the sanctions is not to punish but to achieve a change in behavior."
Therefore, how serious these sanctions are will only be known on November 21, unless Putin convinces Trump by then that he has changed his behavior for the better. Only when Trump begins to impose secondary sanctions against transporters and buyers of Russian oil, primarily in China, will experts believe that he has moved from threats to action.
