Trump threatens to target Russian oil: Will the undercurrent explode?

US President Donald Trump has just shocked the world by announcing that he is considering imposing a 25% 'secondary tax' on all Russian oil exports if Moscow fails to reach a ceasefire agreement with Ukraine. The oil market is heating up.

Trump threatens to impose tariffs, markets are scared

On March 30, President Donald Trump stirred up public opinion when he announced that he was considering imposing a “secondary tariff” on all Russian oil exports, with a tax rate of 25%, even up to 50%. This is a tax levied on imports from countries that have purchased goods from the country that Mr. Trump is targeting in his foreign policy.

Previously, Mr. Trump imposed a 25% tax on goods from countries buying oil and gas from Venezuela.

However, Mr. Trump later softened his earlier harsh words.

Trump’s statement immediately caught the attention of investors and oil market analysts. Russia, along with Saudi Arabia and the United States, is one of the world’s three largest oil producers, playing an important role in stabilizing global supplies. Any move to limit Russian oil exports could have serious consequences.

Russian President Vladimir Putin and US President Donald Trump. Photo: SBS

Many experts believe that the oil market could fluctuate strongly if Mr. Trump's threat comes true because the amount of oil Russia supplies to the world market is very large.

In fact, Russia's oil supply on the international market will not be disrupted even if the conflict breaks out in Ukraine from early 2022. Because India and China have become Russia's two largest oil customers.

The oil market heated up after Mr. Trump's announcement, but the price did not increase much. In the first trading session of the new week on March 31 on the New York market, WTI oil increased by nearly 1.9% to nearly 70.7 USD/barrel. Brent oil also increased by more than 1.2%, to more than 74.5 USD/barrel.

Along with the pressure on Russia, Mr. Trump also showed a tough attitude towards Ukrainian President Volodymyr Zelenskiy, especially in negotiating a resource deal.

All these developments are creating a complex geopolitical picture, in which oil and minerals are at the center of attention.

Are tensions really escalating, what about the global economy ?

It can be seen that Donald Trump has long been famous for his tough negotiating style, often using economic measures such as tariffs to put pressure on opponents. During his first term, he imposed tariffs on Chinese goods and threatened to impose tariffs on goods from many other countries. In fact, Trump has not hesitated to implement such policies.

However, in the case of tariffs on Russian oil, the decision could be more complicated.

First of all, the US has not imported crude oil from Russia since April 2022, so secondary tariffs would target other countries that buy Russian oil, such as India and China. This would require international coordination and could trigger a strong response from the countries involved.

Second, Mr. Trump is aiming to lower oil prices to ease inflationary pressures in the U.S. So disrupting Russian oil supplies could backfire and send oil prices soaring.

Based on the above factors, the possibility of Mr. Trump imposing tariffs on Russian oil is at an average level.

If tariffs are imposed, the US economy could face both benefits and risks. On the positive side, the measure could boost domestic oil production, in line with Mr Trump’s “American energy first” slogan.

However, if global oil prices rise due to disruptions in Russian supplies, American consumers will pay higher prices at the gas station, fueling inflation—something Trump is trying to avoid. Moreover, American refiners that rely on crude from Canada and Mexico may not be directly affected, but global price volatility will still put pressure on the supply chain.

Globally, oil markets could come under significant pressure if supplies from Russia are curtailed. Russia accounts for about 10% of global oil production, and any disruption would send oil prices soaring, especially as OPEC+ has shown no signs of being ready to make up for the shortfall.

Countries dependent on imported oil, such as Europe and Japan, will be hit hard, exacerbating economic pressures already strained by the pandemic and the Russia-Ukraine conflict.

For Russia, secondary tariffs would be a major blow to its oil and gas export revenues, which account for nearly 30% of the national budget. While Russia has already shifted oil sales to India and China to cope with previous sanctions, losing more markets or facing lower prices would further strain an economy already under pressure from military spending and inflation.

China, the biggest buyer of Russian oil, could be hit hard if oil prices spike. With its huge energy needs to sustain economic growth, production costs would rise, especially as Beijing faces the threat of slowing growth and a trade war with the United States.

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Source: https://vietnamnet.vn/ong-trump-doa-nham-den-dau-mo-nga-song-ngam-co-bung-no-2386417.html