Share Share Share Pin

The United States is once again placing economic pressure at the center of its strategy toward Russia. US Treasury Secretary Scott Bessent emphasized that the combination of tougher sanctions and secondary tariffs on countries purchasing Russian oil could force President Vladimir Putin to reconsider the diplomatic track. He underlined that such measures will only be effective if implemented in coordination with the European Union to ensure Moscow’s economy feels the full weight of the restrictions. His statement highlights Washington’s intention to merge financial leverage with political pressure in order to alter the Kremlin’s current calculations.

Secondary tariffs are being presented as a new tool that could be more effective than the existing oil price cap. This mechanism targets third-party countries that continue importing Russian energy by imposing additional import costs. The logic is straightforward: the higher the costs for buyers, the greater the incentive to demand steep discounts or reduce reliance on Russia. Combined with stricter enforcement of the price cap, the policy could erode Russia’s fiscal space at a time when its military expenditures are stretching the national budget to the limit.

In mid-July 2025, the European Union announced its latest sanctions package, lowering the price cap on Russian crude oil to around $47.6 per barrel. The new cap is designed to move with the market, set at roughly 15 percent below average global prices, and came into effect in early September. The aim is to cut Russian revenues without causing a shock to global supply. Meanwhile, the United States has been tightening enforcement by targeting ships, shipping firms, and banks involved in oil trades above the cap.

Recent data shows that Russian seaborne oil exports in July 2025 still reached 25.3 million tons. While the volume remains significant, Moscow increasingly relies on a shadow fleet to bypass restrictions. Interestingly, the share of G7-flagged vessels has risen again as enforcement efforts intensify. Bessent argued that this trend proves existing sanctions are not sufficient. With secondary tariffs, countries such as India, which continues to buy large amounts of Russian oil, would face higher costs and therefore lose part of the benefits from discounted Russian crude.

The Russian government has consistently rejected claims that its economy is weakening under Western sanctions. Officials stress that Asian markets continue to sustain export flows. Yet the International Monetary Fund projects Russia’s growth for 2025 at barely one percent. At the same time, military spending is estimated at 15.5 trillion rubles, or roughly 7.2 percent of GDP, placing a heavy burden on the state budget. International business media have also reported technical stagnation and widening fiscal deficits during the first half of 2025.

Analysts remain divided. Some believe secondary tariffs could accelerate the collapse of Russia’s revenues, while others warn of risks if such measures disrupt global oil trade. Prices could surge if shipments are delayed or diverted. India and China are also unlikely to cooperate. India has openly stated it will not submit to what it views as political coercion, while China has been strengthening its ties with Moscow, even preparing to open renminbi-denominated bond markets for Russian energy giants.

Bessent’s statement underscores Washington’s intention to escalate economic pressure as a path to diplomacy. However, the experience of the past two years has shown that Russia can adapt, whether by diversifying markets, expanding its shadow fleet, or relying on partners willing to overlook Western restrictions. This raises the central question: can a mix of secondary tariffs and price caps genuinely shift Moscow’s position?

If fully implemented, the policy would have consequences far beyond Russia. It could strain relations between the US and major energy buyers. India may view it as interference, while China could seize the opportunity to expand its influence in global energy markets. On the other hand, consistent coordination between the US and the EU remains critical. As long as both blocs maintain unity, economic pressure could become a decisive instrument.

Ultimately, the world is witnessing how economics is being weaponized as diplomacy in a protracted international conflict. Economic pressure is not only about export volumes or tariff levels but also part of a long-term strategy linking political alliances with global energy markets. The unfolding contest will determine whether Russia can continue to adapt or whether the Kremlin will eventually be forced to alter its course. For a broader perspective, readers can continue with Olam News’ coverage on China’s dominance in renewable energy, which explores how Beijing is consolidating leadership in clean energy worldwide.

Subscribe to get the latest posts sent to your email.

Type your email…

Subscribe

DiplomacyEnergyGlobal EconomyInternational PoliticsRussiaSanctionsUnited States