Former President Donald Trump used his address at the United Nations General Assembly this week to issue a stark warning: if Russia refuses to end its war in Ukraine, the United States is prepared to impose what he called a “very strong round of powerful tariffs.” The remarks highlight the intersection of energy markets, geopolitics, and trade, particularly the role of oil and gas in funding Russia’s war effort.
Energy Purchases Under Scrutiny
Trump made clear that while the U.S. has levied penalties on certain nations, much of the burden still falls on European allies. He criticized NATO members for continuing to import Russian energy, arguing that these purchases effectively fund the conflict. He singled out China and India as primary buyers of Russian crude, noting that even with Europe reducing its intake, flows of oil and gas continue to sustain Russia’s revenues.
“China and India are the primary funders by purchasing Russian oil but even NATO countries haven’t cut off much energy and energy products,” Trump said. “They are funding the war against themselves.”
Europe has scaled back its reliance on Russian hydrocarbons since the invasion began, but several nations remain exposed. Hungary and Slovakia still import oil, while France, Belgium, and Spain continue to buy natural gas, though volumes have declined. According to Liana Fix, a senior fellow for Europe at the Council on Foreign Relations, these imports remain a sticking point in collective Western efforts to tighten the economic noose around Moscow.
The European Union has taken steps to align its policies more closely with Washington. Last week, it rolled out sanctions targeting companies in India and China tied to Russian oil purchases and added restrictions on cryptocurrency platforms used to bypass financial constraints. On Tuesday, the bloc advanced its timeline to phase out Russian energy entirely, pledging to end all purchases by 2026, one year ahead of schedule.
Tariffs and Trade Calculations
Trump’s proposal hinges on a coordinated Western front. He argued that tariffs imposed solely by the U.S. would have limited effect unless the EU matched the measures. Without joint enforcement, Russia could continue redirecting crude and natural gas sales to willing buyers.
The U.S. has already penalized India with a 25 percent tariff on Russian oil-linked imports, but it has refrained from taking similar steps against China, which remains Moscow’s largest energy customer. Analysts suggest that Trump’s administration is balancing its pressure campaign with efforts to secure a high-level trade meeting between Trump and Chinese President Xi Jinping. A broader trade agreement remains a potential bargaining chip in calibrating Washington’s stance on Russian energy sales.
Notably absent from Trump’s remarks was any direct criticism of Russian provocations beyond Ukraine. Fix pointed out that Trump avoided addressing Russian airspace incursions against NATO, which have raised security alarms across Eastern Europe. The omission raises questions about how aggressively the U.S. might escalate pressure on Russia itself, rather than focusing primarily on secondary buyers and trade partners.
Trump’s speech also reflected his characteristic use of tariffs as a foreign policy tool beyond the Russia issue. He referenced Brazil, where the Supreme Court recently sentenced former President Jair Bolsonaro, a Trump ally, to prison. In response, the U.S. imposed a steep 50 percent tariff on Brazilian goods. However, Trump struck a warmer tone when describing his encounter with current Brazilian President Luiz Inácio Lula da Silva, noting what he called “excellent chemistry” during a brief meeting at the UN. He even invited Lula to the White House for talks, suggesting tariffs could be reconsidered if relations improve.
Implications for Oil and Gas
For oil and gas markets, the rhetoric underscores the fragile balance between political posturing and trade flows. Europe’s accelerated commitment to end Russian energy purchases by 2026 tightens the outlook for long-term demand, but the near-term reality is more complex. Buyers in Asia remain crucial lifelines for Russian crude exports, and tariffs could reshape trade flows if broadly implemented.
For U.S. producers, any disruption in Russian exports presents both challenges and opportunities. Higher tariffs could constrict global supply, boosting demand for U.S. crude and LNG in Europe and Asia. At the same time, escalating tariffs risk inflaming broader trade disputes, potentially complicating U.S. access to overseas markets.
The intersection of sanctions, tariffs, and energy trade also serves as a reminder of how tightly oil and gas markets are bound to geopolitical strategy. Trump’s UN remarks suggest that tariffs, rather than direct sanctions or military pressure, could become the next lever in Washington’s attempt to curb Russia’s war funding. Whether European partners align with that strategy will be decisive in determining its effectiveness.
