Analysis by Energy Workforce President Tim Tarpley
Over the past few days, the conflict between Russia and Ukraine has continued to escalate with no sign of slowing down. President Trump has voiced his frustrations a number of times via social media, showing his strong displeasure towards Russian President Vladimir Putin. Moscow has also begun massing around 50,000 troops near the border, indicating they are considering a further incursion. This move follows an aerial assault by Russia over the weekend, which was considered to be one of the largest of the war. The assault consisted of 88 drones and five ballistic missiles. In the past few days, Russia has retaken the Kursk region from Ukraine and has pushed over the border into the neighboring Sumy region of Ukraine.
Of significant consequence for the world oil markets, bipartisan support for increasing Russian sanctions is gaining traction. Senator Blumenthal is leading bipartisan legislation, along with many Republicans, including Senator Lindsey Graham, that would impose significant sanctions against Russia, including secondary sanctions, such as a 500% tariff on countries importing Russian energy. This provision could affect China and India, as well as some European allies; however, Germany, France, and Britain have already stated their support for the package. President Trump has so far indicated that he wants to continue pushing the Russians to the table without additional sanctions; however, there are growing indications that he may be changing course. Trump has in the past raised the possibility of additional sanctions on the banking sector and the secondary purchase of Russian energy. It is possible that, given the 80-plus Senators on the bill, the President may move on his own soon. Support for this package is significantly less in the House, so any action by the President on his own will be crucial, as it can expedite things much faster.
Any additional significant actions against Russia in terms of new sanctions will likely put upward pressure on oil prices in the coming days and weeks.
Trump Issues New Tariff Threat on EU but Delays
Before the Memorial Day weekend, President Trump issued a new tariff threat against the EU due to his frustrations over the speed of the trade negotiations. Originally, the President called for the imposition of a 50% tariff on all European goods starting June 1, but after seeing progress later pushed that date to July 9th. This move was after a call between President Trump and European Commission President Ursula von der Leyen on Sunday.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
