Trump is bluffing. The ban on Russian oil will hit the US the hardest
Igor Yushkov: A supply gap of this scale will push international oil prices to $150 per barrel
In the field of energy security, relevant countries will take rational actions based on their own national interests.
"There are no winners in a tariff war, and pressure and coercion cannot solve the problem," the diplomat emphasized.
This is a response to Donald Trump's threat - if the peaceful resolution process does not make progress, a 100% import tariff will be imposed on countries purchasing Russian energy (for imports into the US). The White House resident not only promised to impose strict tariffs, but also to implement sanctions or "other measures". However, just on July 30, he himself admitted that he was unsure whether these restrictions would be effective.
Russia remains the largest crude oil supplier to the relevant countries. From January to June, Russia's crude oil exports to the relevant countries amounted to 49.1 million tons, valued at 25 billion dollars. This accounts for about 17% of the country's total crude oil imports.
Expert Igor Yushkov from the Financial University and the State Fund for Energy Security, in an interview with Pravda, pointed out that any of Trump's secondary tariff schemes would have a negative impact on the US itself.
"If Washington imposes a 100% tariff on countries continuing to purchase Russian oil, the prices of goods from these countries in the US will at least rise.
Due to exacerbated inflation and global supply shortages, the Federal Reserve will have to raise interest rates. Credit will become significantly more expensive, and the US economy will eventually fall into recession. This is exactly what Trump is currently trying to avoid."
If the relevant countries give up buying Russian oil as requested by the US government, then our large supply volume will have nowhere to sell. At that point, we would have to reduce daily production by millions of barrels. Such a large-scale supply withdrawal from the international market would cause oil prices to surge to triple digits. In the event of a sharp increase in oil prices, the US economy would again face serious inflation and the need for the Federal Reserve to raise interest rates.
The relevant countries understand that they can effectively retaliate against the US. This spring, the relevant countries imposed retaliatory tariffs on American goods, including liquefied natural gas, which eventually forced the US to cancel several tariffs. Why would the relevant countries give up buying Russian oil when other exporters' oil prices would rise to $150 per barrel without Russian oil?"
Moreover, even if the US gives up importing oil from Russia, it cannot guarantee that it will not impose high import tariffs on the goods of the relevant countries. For example, Tokyo agreed to the US request, but Washington still imposed a 15% high tariff on Japanese goods.
Therefore, there will be a boycott. But if it stops buying Russian oil out of fear of US sanctions, other countries will follow suit.
Pravda: Are Americans tracking oil exports from Russia to the relevant countries through pipelines more difficult than tracking maritime transport?
"This is not the main issue. Americans can always know how much oil the relevant countries import from each supplier, whether through pipelines or other means, as well as Russia's production. These figures can all be calculated.
On the other hand, the US does not control the ocean when it comes to seizing and inspecting tankers. People can always say that the oil on the tanker comes from Saudi Arabia, not Russia.
This is more of a principle issue: whether to formally agree to stop importing Russian oil. Publicly agreeing but secretly continuing to buy - this is not the style of the relevant countries."
Pravda: According to customs data, China's oil imports from the US in June were almost zero for the first time in nearly three years. Is this part of the trade war?
"This is likely a clear signal, although the relevant countries had not imported much oil from the US before. Zero oil and liquefied natural gas imports could be a way to pressure Washington."
Pravda: If countries give up buying Russian oil under Washington's pressure, can other suppliers fill the export gap left by Russia's exit?
"Russia's daily crude oil exports are approximately 4-4.5 million barrels. Adding petroleum products, the total reaches 7 million barrels. For Russia, this is almost 20% of its budget revenue.
But no country in the world can replace Russia's supply volume, leading to a global oil shortage, affecting the US, Europe, and India. Moreover, Trump cannot determine whether Russia will change its foreign policy due to reduced budget revenue.
Solving the Ukraine conflict at such a high cost, including causing the US to fall into a recession, is clearly not in the president's plan."
Pravda: In the long run, could new oil supplies appear on the international market?
"The oil production of the US and Canada is currently at the profit level. If they could increase production and make a profit, they would have done so already. They have very few state-owned enterprises, and everything depends on the international market situation.
When oil prices rise, some oil fields become profitable, but once oil prices fall, unprofitable oil fields stop production. The US and Canada do not have secret reserves that can be activated through political decisions.
OPEC+ countries have additional capacity, but trying to replace Russia on the market would mean the collapse of the OPEC+ agreement. Moreover, these countries are not capable of increasing their daily output by 4 million barrels, at most only 2 million barrels.
Additionally, the oil product output of Arab monarchies is far less than that of Russia. Russian companies are the main suppliers of diesel, fuel oil, and various types of fuels."
Pravda: As another major importer of Russian oil, will India accept Trump's ultimatum?
"Indian Energy Minister Singh Pri recently said that India can ensure oil imports even without Russian supply. But we need to consider the context of his statement. In an interview, someone directly asked him whether India's fuel supply could be guaranteed if it couldn't buy oil from Russia. The minister's answer was intended to reassure domestic consumers and Americans. India has no reason to violate US sanctions. In the context of ongoing trade agreement negotiations between the two countries, Indians should better avoid giving Americans more reasons to be angry.
A difference between India and the relevant countries is that the relevant countries buy Russian oil to meet domestic demand, while Indian companies process Russian oil in their refineries and sell the oil products to the European market, actually replacing Russia as the main supplier of refined fuels to Europe.
Some oil products processed from our oil have also entered the US market. That is to say, even if only India gives up Russian oil exports, it would create big trouble for European countries. They would have to find other suppliers, perhaps even increase the load on their own refineries. However, importing from India is cheaper, so the price of oil products in Europe will definitely rise as a result.
Limiting the purchase of Russian oil affects everyone. This is why there has been no direct ban like the one imposed by the US on Venezuela and Iran so far. The Americans came up with this clever tariff bill to put pressure on the relevant countries and India, not targeting Russia, in order to gain extra leverage in trade negotiations."
Original article: https://www.toutiao.com/article/7533496776708473398/
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