While the world’s attention is on the battlefields of Ukraine, a global economic war is being waged over Russian oil. Recent moves by the West, including a lower price cap and U.S. tariffs on India, show this economic conflict is intensifying ahead of the Trump-Putin summit.
The Western strategy is to attack Russia’s main source of income. By lowering the price cap for Russian crude to $47.60 per barrel, the G7 and EU aim to reduce the profit Moscow makes on every barrel it sells, thereby limiting its ability to fund its military.
The U.S. is taking this a step further by targeting the customers. The new 25% tariff on India is a powerful warning to any nation considering buying Russian oil above the price cap. It’s an attempt to enforce the sanctions regime and prevent Russia from simply redirecting its exports to new markets.
This economic war is the crucial, and often unseen, context for the upcoming peace talks. The financial pressure being applied is designed to weaken Putin’s negotiating position and make him more willing to accept a deal. The effectiveness of this global campaign will be a key factor in the outcome of the Alaska summit.