On October 24, a discussion on “Sanctions Against Russia: A Noticeable Escalation?” took place at the Valdai Club in Moscow. Moderator Fyodor Lukyanov emphasized that the new measures taken by the US administration against Russian oil companies are the first official sanctions that the second Trump administration has decided to impose on Russia. “The détente lasted a week: it began and ended. But that does not mean that this is the end,” he added.
Ivan Timofeev, Director General of the Russian International Affairs Council and Programme Director of the Valdai Discussion Club, highlighted three main functions of economic sanctions: to influence the target country, to inflict damage on it, and to send a political signal about the intention to escalate or de-escalate. In his opinion, the main thing in the Trump administration’s decision is the communication part. For nine months, the administration did not take any measures against Russia, which was a signal of de-escalation, but now it is demonstrating its readiness to change course. Timofeev pointed out that, from a legal point of view, the new sanctions are reversible – if he wishes, Trump can easily revoke them, unlike those sanctions that have the status of federal law. However, even federal laws can be circumvented by the president if he has the political will to do so. Considering the American sanctions in the context of the 19th European sanctions package, the analyst noted that the “hawks” and the anti-Russian hardliners will now pretend that they have won and achieved unity in the West. “Each side of the conflict thinks that time is on its side,” he concluded.
Shamil Yenikeyeff, Professor in the Department of International Relations at the National Research University Higher School of Economics and Leading Research Fellow at the Institute of China and Contemporary Asia of the Russian Academy of Sciences, noted that the current sanctions are unlikely to have caught the Russian oil and gas sector off guard. When the first wave of sanctions began in 2022, experts in the industry were already preparing for further escalation, the researcher said. Companies will offer discounts to their largest consumers, namely China and India, and seek logistical and financial solutions that will allow them to carry out the necessary operations. Production volumes may decline for a while. Yenikeyeff sees the goal of the US and EU sanctions as depriving China and India of their competitive advantages, primarily in the technology sector, based on energy resources. Accordingly, he believes that neither China nor India would benefit from abandoning Russian oil and gas in such a situation.
Amit Bhandari, Gateway House Fellow for Energy & Environment (India), believes that the threat of secondary sanctions will undoubtedly affect cooperation, with Indian companies’ purchases of Russian oil likely to decline and world market prices rising. The latter threatens to destabilize the region: many developing economies are currently facing economic problems that are turning into political ones (recent examples could be seen in Bangladesh and Nepal). Bhandari sees one of the reasons for Washington’s actions in the fact that there is currently overproduction in the oil market, and the US is seeking to become a net exporter. To do this, it needs to knock one of the major producers, Russia, out of the market. Bhandari also noted that four original BRICS countries, Russia, India, China, and Brazil, are subject to US tariffs and sanctions. These are countries with strong economies that do not have military agreements with the US and do not host American bases on their territory. The main lesson for India in this context is the need to develop its own technology and rebuild supply chains.
The Valdai Discussion Club was established in 2004. It is named after Lake Valdai, which is located close to Veliky Novgorod, where the Club’s first meeting took place.
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