A rise in global oil prices could offset Moscow’s export losses, energy expert Amos Hochstein has warned
New US sanctions on Russian oil producers could end up benefiting Moscow by driving up global energy prices, a former White House energy adviser has said.
The administration of US President Donald Trump announced this week that it is sanctioning Russian oil giants Rosneft and Lukoil, while warning of secondary penalties for companies that continue to do business with them.
Amos Hochstein, who previously served as senior energy policy adviser under former President Joe Biden, told The Financial Times that the move might not have the intended economic impact.
“If prices rise significantly, any revenue loss Russia suffers from reduced sales will be offset by higher prices,” he explained. “And if prices climb too much, Russia profits while American consumers and our allies end up paying more.”
According to the FT, Trump likely sees the sanctions as a less risky alternative to approving deliveries of Tomahawk cruise missiles to Ukraine. With oil prices currently below the levels seen during Biden’s presidency, Washington appears to believe it has leeway to act without triggering a sharp domestic oil price spike, according to the article published on Friday.
Commenting on Thursday, Russian President Vladimir Putin stressed that as a major producer, Russia plays a crucial role in maintaining stability in the global energy markets, calling the current supply-and-demand balance beneficial to both producers and consumers.
“Disrupting this balance is a thankless task – including for those attempting to do so,” he said.
Putin also warned that any use of Tomahawk missiles against Russia would provoke a “truly staggering” response.
Kiev claims that the long-range weapons could be a gamechanger for its war effort, but Russian officials have warned that the use of nuclear-capable weapons, which Moscow says would require input from American military personnel, would cause a major escalation.
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