89. Sanctions do not end wars

U. S. President Donald Trump is quite unpredictable. At times, he shows genuine interest in mediating peace in Ukraine, but other times, he seems more focused on advancing his own agenda.

And that is the reason he is unable to convince the world to stop buying Russia’s fossil fuels.

He has already imposed sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, to prevent Moscow’s ability to fund its war machine. As a result, global oil prices rose by five percent.

The sanctions mean that companies purchasing Russian oil could lose access to the dollar-based financial system, with significant consequences for India and China. 

Reports indicate that by September this year, 86 percent of crude oil exports went to China and India. If Russia lost access to these markets, it could lose approximately $7.4 billion in monthly revenue. And if India alone were to cut its imports, Russia could lose roughly $1.6bn in monthly tax revenues.

But will India take this step? That’s unlikely, mainly because India probably wouldn't consider doing something like this with Russia, its trusted partner—a time-tested ally.

Both will figure out a solution. We are already aware of its export via so-called shadow tankers, a fleet of ageing vessels used to circumvent Western sanctions.

On the eve of Diwali, after wishing Prime Minister Narendra Modi, Trump said Modi had assured him that Delhi would not buy much oil from Russia, as he also wants to see the Russia-Ukraine conflict end. 

However, there is deafening silence from the Indian side, just as it was when he took credit for stopping the Indo-Pak war.

However, China has strongly condemned Trump’s unilateral actions and economic coercion concerning its legitimate oil imports from Russia. It also assured that it will take firm countermeasures if its national interests are at risk.

As usual, no country in the world benefits more from a war than the US. In the case of Ukraine, it is also set to be a significant beneficiary.

Currently, over 55% of the EU’s LNG imports come from the US, a sharp increase from negligible volumes in 2019. Essentially, the US has become Europe’s primary LNG supplier since the Ukraine war. 

As a result of the recent sanctions, if the EU decides to phase out all Russian gas imports, including LNG, by early 2027, the US will gain a significant market.

Why should we ignore that the EU remains the largest buyer of Russian LNG? 

And see their trick. France was the EU’s third-largest buyer of Russian gas last year, all in the form of LNG, some of which was subsequently delivered to Germany. The EU has also bought half of Russia’s total LNG exports, the same as pipeline gas (35%).

Indeed, the peacemaker and its allies are only making noise, and China and India are aware of this. Trump and the EU should look at the history pages. 

Sanctions do not end wars; every country values its self-respect.