Sanctions and tariffs:

 India is one of most important customers for Russian crude oil. China, also, has raised its imports of Russian fossil fuels by 44% since the imposition of sanctions.

 

Nothing changed:

 Before 2022, Europe was easily the biggest importer of Russian energy exports.

 

 Following Russia's invasion of Ukraine, Europe imposed sanctions on various different Russian products,  particularly oil in an attempt  to reduce Russian revenues for its war efforts.

 

However all that happened was those Russian tankers which had delivered oil to Europe began instead to deliver the oil to Indian oil refineries, whilst the Middle Eastern oil tankers that had previously served those Russian refineries began sending their oil to Europe. Nothing, fundamentally, really changed.

 

So while Europe was no longer taking direct shipments of Russian oil, they were, and are, taking shipments of oil products, ranging from diesel and petrol to kerosene, all made from Russian oil in Indian refineries.

 

In the face of this, Europe and its G7 allies have tried to prevent those tankers from taking Russian oil by introducing a price cap on legitimate shipping companies, limiting the amount of revenue Russia could derive from its exports.

 

In response,  Russia began to build up its own "shadow fleet" of tanker, using them to continue exporting oil to India and China.

 

And so, in the latest episode of sanctions "whack-a-mole", the G7 has begun to implement a separate round of bans on that shadow fleet!

 

Thus whilst each action by Europe has had some effect it is clear for sanctions to have a profound effect is proving difficult.

 

So it has come to the stage whereby Trump is now talking about raising tariffs or imposing sanctions on India. He has discussed imposing secondary sanctions on countries continuing to do business with Russia.

 

To give Donald credit, these are powerful economic levers that even Joe Biden stopped short of pulling.

The question is,  will Donald pull the lever?

 

With reference to: Europe tried to starve Putin's war machine with sanctions - but something else has happened

 

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