The bill is being pushed by several US Senators, empowering the president to impose huge tariffs on countries that continue to buy energy from Russia. However, analysts believe that the real goal of the bill is to be a tool for political pressure rather than a serious implementation solution.
If President Donald Trump really wants to impose sanctions, he can issue executive orders without a new bill, according to Igor Yushkov from the Russian Academy of Finance and the National Energy Security Fund. This is clearly a tool that is political, not a policy that can be implemented in practice, Mr. Yushkov commented.
Ms. Yekaterina Kosareva, executive partner at WMT Consult, also agreed. She cited Trump's refusal to support the G7 initiative to lower the price cap on Russian oil from $60 to $45 per barrel - showing that the US President is very cautious about measures that could push oil prices up.
Taxing countries that import Russian oil and gas will cause global energy prices to skyrocket, which Mr. Trump is trying to avoid, said Ms. Kosareva.
The 500% tax proposal is being played by US Senators, said Dmitry Suslov, deputy director of the Center for European and International Studies at the Russian Institute of Economics. Meanwhile, the Trump administration plays a reasonable friend, not directly supporting but not denying, giving Russia a deadlock to a ceasefire in Ukraine.
Suslov said there was no official signal from the White House or the US State Department supporting the bill. And if approved, it would go against the Trump administration's recent diplomatic moves, including a temporary trade deal with China and active talks with India, two key partners that import large volumes of Russian oil.
apelling tariffs on India an important counterpart of China will bring New Delhi closer to Moscow and Beijing in the BRICS bloc, warned expert Konstantin Blokhin from the Russian Academy of Sciences.
Russia currently accounts for about 11% of global oil exports, 28% of pipeline gas and 10% of liquefied natural gas (LNG). If it suddenly withdraws from the world market, the energy market will witness a completely reversal shock compared to the COVID-19 period, when oil demand decreased by 25% after only a few weeks.
An unreasonable move will cause chaos in the world market, and eventually, American consumers will have to pay with sky-high gasoline and heating bills.
The bill to sanction countries buying Russian oil with a 500% tax rate could be a political stance of Mr. Trump to put pressure on Moscow. However, if it goes too far, it could spark a full-scale trade war, disrupt relations with key partners and push the US economy into a spiral of energy uncertainty, something no Washington administration would have wished for.
