U.S. President Donald Trump’s extensive tariff policies, while not directly targeting Russia, are still posing significant challenges to the Russian economy, which heavily depends on oil exports.
Elvira Nabiullina, the governor of Russia’s central bank, stated last week that the global tariffs are indirectly impacting Russia, primarily through a sharp decline in oil prices. Oil accounts for about half of Russia’s export income.
Nabiullina explained, “If tariff wars continue to escalate, they generally lead to a downturn in global trade, a slowing global economy, and possibly a reduction in demand for our energy resources.” She added that Russia is closely monitoring the situation but acknowledged the risks involved.
Although President Trump temporarily paused some of his tariff plans last week—except for those imposed on China—the global markets have shown signs of unease since Trump’s “Liberation Day” on April 2.
From January 15 to now, the price of Brent crude has fallen from $83 to $64 per barrel, while West Texas Intermediate has dropped from $78 to $60.
Russia’s economy is already grappling with high inflation and increased defense spending as the war in Ukraine continues. Moscow’s military budget exceeds the total defense spending of all European countries combined, and analysts predict that Russian President Vladimir Putin will avoid reducing military expenditures for as long as possible.
The tariffs have already had a noticeable impact on Russian oil prices. Prices dropped sharply on April 2 and have struggled to recover since, according to Aura Sabadus, an energy market specialist with the Royal United Services Institute (RUSI) and the Independent Commodity Intelligence Services (ICIS).
Sabadus noted that oil prices are about $10 per barrel lower since April 2 and are likely to remain at this reduced level. “Russia is worried,” she said.
Kari Liuhto, a professor of international business at Finland’s University of Turku, pointed out that while Trump’s tariffs were not intended to collapse oil prices, long-term low oil prices will likely have a detrimental effect on Russia’s economy.
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