Estonians urged to tolerate expensive gasoline in support of Ukraine
In the event of former U.S. President Donald Trump imposing secondary sanctions on Russia, particularly targeting Russian oil exports, the potential impact on Estonia and the European Union (EU) could be significant.
These secondary sanctions, if implemented, would tighten restrictions on Russian oil trade, potentially lowering the price at which Russia can sell oil globally. This move would align with recent EU sanctions that have lowered the Russian oil price cap to $47.60 per barrel, aimed at forcing Russia to sell oil below market value and thereby reduce the revenues funding Russia’s war efforts.
For Estonia, a Baltic state directly impacted by Russian energy dependency and security dynamics, such sanctions could further restrict Russia's oil export capabilities. This could sustain or increase upward pressure on gasoline and fuel prices in Estonia.
The reasons for this are twofold. Firstly, Estonia and the EU have already imposed sanctions restricting imports and transactions related to Russian oil and refined petroleum products, contributing to reduced supply and higher energy prices in the region.
Secondly, secondary sanctions targeting entities or countries that continue to do business with Russia would heighten enforcement, reducing Russia’s ability to circumvent sanctions. This could lead to supply disruptions and volatility in regional fuel markets, indirectly pushing Estonia’s gasoline prices upward.
Russia’s reaction to such sanctions might include cutting supplies to Europe or seeking alternative markets at discounted prices. Such actions could cause further supply disruptions and volatility in regional fuel markets, exacerbating the potential increase in gasoline prices in Estonia.
In summary, Trump imposing secondary sanctions would likely compound the existing European sanctions’ effects, leading to tighter limitations on Russian oil exports and contributing to higher gasoline prices in Estonia due to supply constraints and geopolitical risks influencing energy markets. This would be consistent with Estonia's official stance on supporting strong sanctions to weaken Russia’s war capacity, but it reflects a trade-off of increasing energy costs for Estonia and EU countries.
However, it's important to note that Alan Vakht, a member of the Terminal management Board, predicts that Estonian drivers should not anticipate a significant reduction in gas prices at stations due to the potential impact of secondary sanctions on oil prices. Vakht's statement was regarding the potential impact of secondary sanctions on oil prices, not the final prices at the pump.
The secondary sanctions, if imposed by Donald Trump, could potentially lead to an increase in the enforcement of EU sanctions, making it more difficult for Russia to circumvent sanctions and thus causing disruptions and volatility in regional fuel markets. This could indirectly push gasoline prices in Estonia upwards.
Furthermore, given that Estonia is already experiencing reduced supply and higher energy prices due to existing sanctions, any tightening of limitations on Russian oil exports could further contribute to increased gasoline prices in Estonia.
