After the announcement of the first anti-Russian sanctions of the Donald Trump era, it turned out that many oil-refining enterprises in the so-called “Global South,” which had previously been purchasing Russian oil, began reducing their orders even before the sanctions came into force. And it’s not only about India or Turkey — their caution was, in fact, predictable. It’s also about China.
Such behavior from oil refiners contradicts the forecasts of experts who had promised that India and Turkey would easily adapt to sanctions against Rosneft and Lukoil, and that China would not even notice them — especially since, according to the U.S. President himself, the issue of China’s purchases of Russian oil was not even discussed during Trump’s recent meeting with Chinese leader Xi Jinping.
But the experts drew their conclusions based on prior experience ignoring earlier U.S. sanctions introduced under the Joe Biden administration against other Russian companies — Surgutneftegaz and Gazprom Neft. Expectations for those sanctions had been very high, but the results proved disappointing. Russia managed to bypass them with little difficulty through the use of a “shadow fleet” and intermediary companies. As a result, the volume of Russian oil supplies to the Global South actually increased rather than decreased. So much for that! That is why some analysts advised the Trump administration to focus on enforcing existing sanctions instead of inventing new ones.
However, one must understand that Trump’s first sanctions are not Biden’s last ones. Within the new administration, there was little interest in monitoring the enforcement of sanctions against Surgutneftegaz and Gazprom Neft. First, because they wanted to demonstrate the helplessness of the Biden administration — after all, we hear almost daily that this is “Biden’s war,” not Trump’s. And second, Trump initially believed in his good relationship with Putin. He was convinced that if he offered the Russian president comfortable terms for a ceasefire on the Russian-Ukrainian front, the war would end immediately. Why “torment” Putin with oil supply restrictions then?
Now, however, the situation has changed radically. Trump himself has moved to exert pressure on Putin to force the Russian president into genuine negotiations on ending the war. And anyone who tries to circumvent Trump’s sanctions may be seen as a personal enemy of the U.S. president, obstructing his peacemaking efforts.
One of the first proofs of this was the U.S. refusal to approve the resale of shares in the now nearly-sanctioned Lukoil to the company Gunvor, owned by one of Putin’s closest oligarch allies, Gennady Timchenko. Putin tried to play his favorite shell game with Trump — and miscalculated. Many in Moscow had sincerely believed that simply “rebranding” Lukoil into Gunvor would settle the issue.
But this refusal to help Timchenko — and, by extension, Putin — is a signal not only to Moscow but also to Beijing, New Delhi, and Ankara: these sanctions are real, not a joke, and violators will indeed be punished. This means that Russia may truly lose a significant portion of its energy revenues in the coming months. The mad gas station is shutting down.
The only thing that matters now is that Trump himself plays this “game of chicken” with Putin correctly. After Hungarian Prime Minister Viktor Orbán’s visit to Washington and his talks with Trump, it became known that Hungary (and thus Slovakia, since the two countries share a single oil refinery) will receive a one-year exemption. The motives behind this decision are transparent — the American president wants to save his old friend and help him win the upcoming parliamentary elections. Orbán indeed faces serious problems with his reelection prospects, and if prices rise due to abandoning Russian oil, his chances would vanish completely. But clearly, if there is a chance to obtain an exemption, others will be tempted to seek one as well. And that, in fact, is the main risk: if “dear Viktor” can use Russian oil for another year, perhaps nothing will happen to the rest of us either.
On the other hand, these are clearly not Donald Trump’s final sanctions. The U.S. president continues to hope that common sense will prevail and his Russian counterpart will eventually agree to a ceasefire. But even Trump admits that Putin shows no intention of stopping.
Therefore, new sanctions will follow. This may be only the beginning of the pressure.
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