Kirill Shulika states that sanctions are ineffective in achieving their intended goal
The Baltic Sea is currently a hotbed of tension, with the tanker fleet causing concern due to ecological issues and soaring energy prices. This tension, however, is not just limited to the region, as it extends to the global oil market, particularly the trade between Russia and key buyers like China, India, and Brazil.
In the midst of this standoff, former President Trump's focus on profit and gain has raised questions about the potential loopholes he might leave for countries buying Russian oil. Despite the threats of steep tariffs (up to 100%) on countries such as India, China, and Brazil, these nations appear to be balancing economic benefits and geopolitical risk by continuing or even increasing their imports, particularly India and China.
India, in fact, has become Russia's largest crude oil customer, increasing imports from a mere 2% pre-Ukraine conflict to 36% of its total crude imports by 2024-2025. This shift has provided India with significant cost savings and fuel price stability, though discounts have narrowed compared to earlier years.
China, Russia's second-largest crude oil buyer, maintains a strategic, long-term procurement policy. China imports 2.2 million barrels per day, constituting about 20% of its oil demand, though some state enterprises have recently curtailed purchases due to secondary U.S. sanctions.
Brazil, on the other hand, plays a more prominent role in importing Russian refined oil products, joining Turkey and China in filling gaps left by EU and UK sanctions.
The U.S., led by Trump and some senators, has threatened these countries with tariffs, aiming to curb funding to Russia's military activities. However, these threats have not deterred the nations from continuing their oil trade with Russia. Secondary sanctions and banking restrictions have complicated transactions, especially for China, pushing Russia to use intermediaries and alternative financial channels to circumvent payment blockades.
Despite the ongoing tension, the current status of oil trade between Russia and these key buyers remains robust. China has no plans to reduce its Russian oil purchases, while India is partially cutting back but unlikely to find a complete replacement elsewhere. The landscape involves complex geopolitical and economic calculations, with neither buyer fully abandoning Russian oil imports as of mid-2025.
In Moscow, U.S. President Donald Trump's special envoy, Stephen Biegun, is expected to discuss these issues with Russian President Vladimir Putin. The talks will likely revolve around the Ukrainian conflict and the ultimatum set by the White House, which expires on August 8. However, the Kremlin's logic in Ukrainian settlement differs from Trump's focus on economic issues and profit proposals. Russia prioritizes security and global politics in the Ukrainian settlement, and it's unlikely that the special envoy has any breakthrough proposals on these matters.
The discussions will also center around tariffs Trump has threatened to impose on buyers of Russian oil, primarily China, India, and Brazil. Trump's threats about tariffs follow a pattern of proposing a harsh option that's later softened according to business negotiation principles.
In a broader context, the institution of sanctions is overrated in today's global economy, as no country against which restrictions have been imposed has met the demands set for their removal. This suggests that the impact of sanctions may not be as significant as initially perceived, and countries may continue to engage in trade based on economic interests and geopolitical considerations.
In conclusion, the standoff in the Baltic Sea mainly consists of verbal debates and demands, not physical confrontation. The current status of oil trade between Russia and key buyers like China, India, and Brazil remains robust despite the threat of U.S. tariffs and ongoing sanctions. The landscape involves complex geopolitical and economic calculations, with neither buyer fully abandoning Russian oil imports as of mid-2025.
- The ongoing tension between Russia and key oil buyers, such as China, India, and Brazil, is not confined to the Baltic Sea or the oil market, but extends to the broader realm of policy-and-legislation and politics, as the U.S., led by Trump and some senators, has threatened these nations with tariffs in an attempt to curb funding for Russia's military activities.
- Despite theVERbal debates and threats of steep tariffs (up to 100%) on key buyers like India, China, and Brazil, these nations appear to be balancing economic benefits and geopolitical risk by continuing or even increasing their imports, particularly India and China, which have strategic, long-term procurement policies in place. This complex landscape of war-and-conflicts, oil trade, and general-news highlights the resilience of these economies and their willingness to adapt to evolving circumstances.
