Advisers to the designated US President Donald Trump are working on a comprehensive strategy to address the anti-Russian sanctions, which could foster a solution to the Ukraine conflict. According to Bloomberg, citing unnamed sources, the strategy would focus on the Russian oil industry and primarily involve two approaches. One would see the relaxation of restrictions and some measures in favor of the sanctioned Russian oil producers that could contribute to a peace agreement, if the future Trump administration recognizes the possibility of a conflict resolution. Otherwise, Washington could expand the sanctions to exert even more pressure on Moscow.
These plans are still in the early stages, with a final decision hanging in the balance, pending Trump’s choice, Bloomberg emphasizes. Regardless of the approach Trump ultimately chooses, it will have consequences for global oil prices. The publication recalls that the incumbent President Joe Biden recently imposed the harshest restrictions on Russian oil, which had already caused a price increase. Since the sanctions were announced last Friday, the Brent futures price has risen by almost 5 US dollars per barrel.
Trump’s advisors would need to grapple with the same question as Biden: how to avoid larger supply and price disruptions on the oil market while Washington imposes extensive sanctions on Russia, as well as Iran and Venezuela, the world’s three major producers. Moreover, they would need to find a balance between “economic warfare” and the desire to maintain the US dollar as the world’s reserve currency.