Global oil prices passed $102 a barrel on Tuesday morning after reports that U.S. allies in the Persian Gulf are inching toward joining the war against Iran.
Brent crude futures for May delivery were rising 2.8% to trade at $102.74 a barrel as of 8:40 a.m. Eastern time, while West Texas Intermediate contracts for May delivery were up 3.9%, to $91.56 a barrel.
Both oil benchmarks on Monday fell sharply after President Donald Trump wrote in a post on Truth Social that the U.S. would be halting strikes on Iran’s power plants for five days “subject to the success of the ongoing meetings and discussions.” Both the Brent and WTI on Monday settled at their lowest levels since March 11, according to FactSet data.
Market optimism has faded since Iran refuted Trump’s claims that the U.S. has had “very good and productive” talks with Tehran, with Parliament Speaker Mohammad Baqer Ghalibaf calling the announcement “fake news” used to “manipulate” markets.
“Obviously much now depends on the progress of any talks, and whether the more optimistic rhetoric is followed up by concrete action,” Jim Reid, head of global macro research at Deutsche Bank, wrote in a note on Tuesday, adding that “some nervousness” had crept back into markets, sending Brent crude back past the $100 threshold.
Investors’ concerns regarding the future of the war in Iran were also exacerbated by a Wall Street Journal report on Monday evening that U.S. allies in the Persian Gulf are edging closer to joining the conflict. Saudi Arabia and the United Arab Emirates are mulling helping efforts as their economies continue to be disrupted by the strikes and the effective closure of the Strait of Hormuz.
The report notes that neither has deployed its military openly yet, but pressure is increasing as Tehran continues to exert control across the region, with energy infrastructure targeted.
“Investors are still unclear about what happens next. The fog of war is thick,” said David Morrison, senior market analyst at Trade Nation. “The Strait of Hormuz remains closed to just about everything, and that should continue to support energy prices. This in turn plays into fears of higher inflation, adding to concerns that were building even before hostilities began.”
U.S. stock futures were edging lower after all three major benchmarks on Monday booked their biggest daily percentage gains since early February. The Dow Jones Industrial Average futures were off 0.5%, while the S&P 500 futures were falling 0.4% and the Nasdaq 100 futures were dropping 0.6%, according to FactSet data.
Slovenia on Sunday temporarily limited fuel purchases to tackle shortages at the pump caused in part by cross-border fuelling and stockpiling due to the Iran war, raising concerns about security of supplies just as the country goes to the polls.
Fuelling at individual service stations has been restricted to 50 litres per day for private vehicles and 200 litres for companies and other priority users such as farmers, Prime Minister Robert Golob announced on Saturday evening.
The restrictions will stay in force until further notice.
“Let me reassure you that there is enough fuel in Slovenia, the warehouses are full and there will be no fuel shortages,” said Golob, a liberal who is standing against right-wing populist Janez Jansa in an election on Sunday.
Golob said the problem lay in the transportation of fuel to filling stations, and that the army would use tankers to help retailers move supplies. The government also recommended that retailers prepare special measures for foreign drivers, without being specific.
Petrol, the largest Slovenian oil distribution company in which the state has a 32.3% stake, has seen long queues at its gas stations in recent days due to fuel shortages.
Many filling stations across Slovenia were closed on Sunday. Those belonging to Hungarian oil and gas group MOL have remained open but had already limited purchases to 30 litres for individuals and 200 litres for companies.
“Today we didn’t have problems because I have an application where I can check where to tank (fill up),” teacher Tamara Gale Beasinsky, 40, said at a gas station in Ljubljana. “But yesterday we had a problem because we were waiting more than 20 minutes in the queue … and we were able to tank only 30 litres of diesel.”
At an emergency session on Sunday, the government accused Petrol of failing to eliminate disruptions in fuel distribution and ordered an inquiry into possible violations in fuel trading and the management of critical infrastructure.
It also called on the Slovenian sovereign wealth fund to request a meeting of Petrol’s shareholders and ask for a special audit of the company’s logistics operations after March 16.
The government also ordered the interior ministry to submit a report to law-enforcement agencies due to “possible grounds for suspicion” of criminal offences by some Petrol staff.
Petrol did not reply to Reuters’ requests for comment. It said on Saturday that fuel supplies remain stable and that supply sources are secured, blaming occasional shortages at individual points of sale on increased demand locally.
(Reporting by Fatos Bytyci, Gaspar Lubej and Branko Filipovic; Writing by Daria Sito-Sucic; Editing by Kirsten Donovan and David Holmes)
Tehran has said it will “irreversibly destroy” essential infrastructure across the Middle East, including vital water systems, if the US follows through on Donald Trump’s threat to “obliterate” Iran’s power plants unless the strait of Hormuz is fully opened within two days.
As Iranian missiles struck two southern Israeli cities overnight, injuring dozens of people, and Tehran deployed long-range missiles for the first time, the developments signalled a dangerous potential escalation of the war, now in its fourth week, with both sides threatening facilities relied on by millions of people.
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The speaker of the Iranian parliament, Mohammad Bagher Ghalibaf, said on Sunday that vital infrastructure in the region – including energy and desalination facilities – would be considered a legitimate target and would be “irreversibly destroyed” if his country’s own infrastructure was attacked.
Amnesty International said this month there was a substantial risk that attacks on systems providing essential services such as electricity, heating and running water would violate international law and “in some cases could amount to war crimes” because of the potential for “vast, predictable, and devastating civilian harm”.
The Iranian military’s operational command headquarters, Khatam al-Anbiya, said Iran would strike “all energy, information technology and desalination infrastructure” belonging to the US and Israel in the region.
The statement also said that if Trump’s threat was carried out, the strait of Hormuz would be “completely closed, and will not be reopened until our destroyed power plants are rebuilt”.
Iran’s president, Masoud Pezeshkian, said “threats and terror” were “only strengthening Iranian unity”, whilethe “illusion of erasing Iran from the map” showed “desperation against the will of a history-making nation”.
Guardian graphic. Source: Global Water Intelligence, desaldata.com
The US president said on Saturday that he was giving Iran 48 hours – until shortly before midnight GMT on Monday – to open the strait of Hormuz, a vital pathway for the world’s oil flows, or the US would “hit and obliterate” Iranian power plants “starting with the biggest one first”.
The US ambassador to the UN, Mike Waltz, defended Trump’s threat on Sunday, insisting that Iran’s Islamic Revolutionary Guard Corps (IRGC) controlled much of the country’s infrastructure and used it to power its war effort.
He said Trump would start by destroying one of Iran’s largest power plants, but did not identify it. “There are gas-fired thermal power plants and other type of plants,” and “the president is not messing around”, he said.
A No 10 spokesperson said Keir Starmer spoke to Trump on Sunday evening about the need to reopen the strait of Hormuz.
Iran’s representative to the International Maritime Organisation, Ali Mousavi, said on Sunday that the strait was open to all shipping except vessels linked to “Iran’s enemies”, with passage possible by coordinating security arrangements with Tehran.
Iranian attacks have in effect closed the narrow strait, which carries about a fifth of global oil and liquefied natural gas supplies, causing the world’s worst oil crisis since the 1970s and sending European gas prices surging by as much as 35% last week.
Only a relatively small number of vessels, estimated at about 5% of the prewar volume, from countries that Tehran considers friendly – including China, India and Pakistan – have been allowed to pass.
A Tehran billboard featuring a portrait of the late supreme leader Ayatollah Ali Khamenei. (AFP/Getty Images)
More than 2,000 people have been killed in Iran since 28 February, when the US and Israel began their attacks, and Tehran in turn has struck targets in Israel and the Gulf states. Lebanon was drawn in after Iran-backed Hezbollah attacked Israel.
Air raid sirens sounded across Israel from the early hours of Sunday morning, warning of incoming missiles from Iran after scores of people were injured overnight in two separate attacks on the southern towns of Arad and Dimona.
The Israeli army said on Sunday morning that it would strike Tehran in retaliation. The country’s prime minister, Benjamin Netanyahu, said during a visit to Arad that senior IRGC commanders would be pursued.
“We’re going after the regime. We’re going after the IRGC, this criminal gang,” he said. “We’re going after them personally, their leaders, their installations, their economic assets.”
The Iranian health ministry spokesperson, Hossein Kermanpour, said patients had been evacuated from the Imam Ali hospital in the south-west city of Andimeshk on Sunday after an airstrike a day earlier.
Bomb damage in Arad, Israel. (Amir Levy/Getty Images)
Israel’s military said it had not been able to intercept the missiles that hit Dimona and Arad, the nearest large towns to the country’s nuclear centre in the Negev desert, which houses what is widely believed to be the Middle East’s only nuclear arsenal.
Israel has never admitted to possessing nuclear weapons, insisting that the site is for research. The strikes marked the first time that Iranian missiles had penetrated Israel’s air defence systems in the area.
The strikes wounded about 200 people, including a 12-year-old boy and a five-year-old girl, both reported to be in a serious condition. The Israeli broadcaster Channel 13 reported early indications of possible deaths but there was no official confirmation.
Iran said the attacks had been launched in response to a strike on its main nuclear enrichment facility at Natanz on Saturday. Israel denied responsibility for the attack and the Pentagon declined to comment.
In Tel Aviv, 15 more people were injured on Sunday morning in a separate incident involving a cluster bomb. The attacks are adding to mounting pressure on Israel’s air defence systems as Iranian strikes increasingly test their limits.
The World Health Organization said that the war was at a “perilous stage” and called for restraint. “Attacks targeting nuclear sites create an escalating threat to public health and environmental safety,” the WHO director general, Tedros Adhanom Ghebreyesus, said.
Tehran also fired long-range missiles for the first time on Saturday, the Israeli military chief, Eyal Zamir, said. Two ballistic missiles with a range of 2,500 miles (4,000km) were fired at the US-British Indian Ocean military base at Diego Garcia, he said.
Guardian graphic
The British cabinet minister Steve Reed said one missile had fallen short and the other had been intercepted. There was no assessment backing claims that Iran was planning to strike Europe, he said.
The Israel Defense Forces had said Iran had missiles that could reach London, Paris or Berlin, but Reed said he was not aware of any assessment at all that Iran was even trying to target Europe, “let alone that they could if they tried”.
He said in a separate interview that Trump had been “speaking for himself” when he threatened to obliterate Iran’s power plants.
Analysts said Trump’s threat had placed “a 48-hour ticking timebomb of elevated uncertainty” over energy and financial markets, with a “black Monday” of plunging stock markets and surging energy prices looming unless it was rowed back.
Guardian graphic
At least six overnight attacks targeted a US diplomatic and logistics centre at Baghdad airport, Iraqi officials said, while Saudi Arabia said three missiles had been detected over Riyadh. The UAE said it had responded to Iranian missile and drone attacks.
In southern Lebanon, Israel said its military had raided Hezbollah sites on Sunday and killed 10 of the group’s fighters. It said it was expanding its ground campaign in Lebanon, warning of a lengthy operation. Hezbollah said it had attacked several border areas in northern Israel. One person was killed in an Israeli kibbutz, emergency services said.
At least 10 Palestinians were injured on Sunday night in attacks in the occupied West Bank by Israeli settlers who rampaged through nearby villages after holding a funeral for a settler killed in a car crash a night earlier.
Videos obtained by the Associated Press appeared to show cars and homes set ablaze as army flares lit up the sky near the village east of Nablus and next to the Israeli settlement of Elon Moreh.
Three Turkish nationals, including a soldier, and three Qatari service personnel were killed when a helicopter crashed in Qatar’s territorial waters, the country’s defence ministry said on Sunday.
According to an academic analysis seen by Reuters, an interceptor missile that injured dozens of civilians in Bahrain 10 days into the war was probably fired by a US-operated Patriot air defence battery.
Manama and Washington have blamed an Iranian drone attack for the explosion on 9 March, which Bahrain has said injured 32 people including children, some of them seriously.
Soaring oil prices threaten to hit US growth, worsen inflation and keep the Federal Reserve from lowering interest rates, top economists have warned ahead of the central bank’s first rate decision since the Iran war began.
US oil prices have jumped almost 50 per cent since the US and Israel struck Iran at the end of last month to about $95 a barrel, sending the costs of petrol and diesel at the pump surging higher.
The majority of academic economists polled by the Clark Center for Global Markets on behalf of the Financial Times said that, if oil prices were to remain at $100 a barrel, slightly above their current level, US growth will decline markedly.
Tehran has largely closed the Strait of Hormuz, a waterway through which a fifth of the world’s oil flows, in retaliation for the strikes on Iran. The disruption has caused a global supply crunch and is hitting US consumers and businesses despite the US’s role as a major energy producer.
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“The key question is the extent and duration of a blockage of the Strait of Hormuz,” said James Hamilton, professor at University of California San Diego and an energy market expert. “If it goes on for a month or so, then this is a very big deal. And I think it would lead to a significant downward revision in the kind of growth we’re expecting for this year.”
Some 68 per cent of respondents anticipated a significant hit to GDP growth this year of at least 0.25 to 0.5 percentage points should oil stay at $100 for the rest of 2026, compared with a scenario with $75 oil. Just 2 per cent thought the economic impact of high oil prices would be positive, with the rest expecting little to no impact in either direction.
The US economy expanded at a 0.7 per cent annualised clip in the final quarter of 2025, from the previous quarter’s 4.4 per cent growth rate.
Panellists’ growth warnings contrast with White House officials, who say the conflict will do little harm to the prospects of the world’s largest economy.
“If [the war] were to be extended, it wouldn’t really disrupt the US economy very much at all,” said Kevin Hassett, director of the White House’s National Economic Council, on Tuesday.
“It would hurt consumers, and we’d have to think about — if that continued — what we’d have to do about that, but that’s really the last of our concerns right now because we’re very confident this thing is going ahead of schedule,” he said in an interview with CNBC.
The Trump administration’s war on Iran has exacerbated the challenges facing Fed officials, who are set to make their latest policy decision on Wednesday.
Even before the conflict began, the central bank was facing a delicate balancing act over whether to prioritise its fight against inflation or the latest signs of a slowdown in the US labour market.
The Bureau of Labor Statistics said the US economy lost 92,000 jobs in February while corporate America has laid off tens of thousands of workers this year.
At the same time, the jump in petrol and diesel costs — now at the highest levels in either of President Donald Trump’s White House terms — risks undermining the American public’s faith in the central bank’s commitment to stamp out inflation.
Headline personal consumption expenditures inflation (PCE) is 2.8 per cent and has been above the 2 per cent level the Fed targets since early 2021.
If oil stays near $100 for a prolonged period, it would lead to a rise in headline PCE inflation of at least 0.25 to 0.5 percentage points by the end of the year, according to more than 80 per cent of those polled.
The 47 economists — surveyed quarterly by the Clark Center, part of the University of Chicago’s Booth School of Business — also say the Fed will now need to wait longer before core PCE inflation falls to its 2 per cent goal. That category excludes food and energy prices.
Six in 10 participants in the survey now expect it will take until at least the first half of 2028 before price pressures return to 2 per cent — up from just under half in December.
Fed watchers widely expect the central bank to hold the federal funds target range at 3.5 per cent to 3.75 per cent on Wednesday. Markets are betting the oil price rise has pushed the next cut back until the spring of next year, after three quarter-point cuts in 2025.
Fed officials will also publish their latest economic and rate projections, known as “dot plots”, later on Wednesday.
The FT panel in the latest survey was less sure US benchmark borrowing costs would end the year lower than their current level. Roughly a third said they now expected no cuts for the duration of 2026, compared with 15 per cent in December.
“My prediction right now is that you’re not going to see much action [from the Fed] for a while,” said Stephen Cecchetti, a Brandeis University professor. “The uncertainty is so high that you have to wait. I would be waiting. But I would be unhappy that I had to start from here.”
American businesses and families are staring down the barrel of another self-inflicted energy crisis, this one entirely of President Donald Trump’s making. Just weeks into his second term, the former real-estate developer turned wartime president has plunged the United States into a costly military showdown with Iran — and the bill is already landing squarely at the gas pump, on airline tickets, and in the supply chains that keep corporate America humming.
The average price of a gallon of regular gasoline across the United States jumped 34 cents in the past week alone to $3.32 on Friday, according to AAA data. Diesel prices have climbed even faster. Industry analysts warn the upward spiral has only just begun. When oil first spiked after Trump ordered strikes on Iran last week, many on Wall Street assumed cooler heads — or at least economic reality — would prevail and force a swift diplomatic off-ramp. That assumption now looks painfully naïve.
Oil prices are climbing
Price per barrel of Brent Crude
Source: S&P Market Intelligence and Oilprice.com
DAVID DANYEL / THE NEW YORK BUDGETS
Instead, U.S. and Israeli strikes continue, Iranian drones are hitting energy infrastructure in Saudi Arabia and Qatar, and hundreds of oil tankers sit idle in the Persian Gulf, too terrified to run the gauntlet of the Strait of Hormuz. The result? A textbook supply shock that is hammering businesses large and small.
Qatar’s energy minister, Saad Sherida al-Kaabi, delivered the latest gut punch in an interview with the Financial Times on Friday. He warned that without an immediate de-escalation, Persian Gulf producers will be forced to halt output “within days,” sending global oil prices toward $150 a barrel — more than double pre-war levels. That would push U.S. pump prices back to the $5-a-gallon peaks last seen after Russia’s invasion of Ukraine in 2022.
“If the Trump administration does not do something to restore confidence in ships traveling through the Strait of Hormuz, these prices are going to keep heading up,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “I don’t wake up too many mornings and get the chills when I look at the morning oil price numbers. It’s starting to feel like 2022 all over again.”
The pain is already rippling far beyond the neighborhood Exxon station. United Airlines CEO Scott Kirby told investors at an industry conference Friday that jet-fuel costs are climbing so fast that airfares will have to follow — and quickly. Shipping rates are rising in tandem. Travis Maderia, co-founder of New York-based LobsterBoys, which exports live Maine lobsters to restaurants worldwide, put it bluntly: “Transportation is a big part of our business. When airline prices go up, the cost of sending lobsters overseas can be dramatically impacted.”
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Oil derivatives are embedded in everything from plastic packaging and semiconductor chemicals to industrial gases. BloombergNEF natural resources research chief David Doherty notes that Iran’s cheap drone attacks have made defending scattered energy infrastructure far harder than in past Middle East conflicts. “It is harder to protect oil infrastructure,” he said. “Defending the same breadth of space has become much more difficult than it was in the past.”
Even Trump’s attempts to calm markets have fallen flat. On Truth Social he doubled down: “There will be no deal with Iran except UNCONDITIONAL SURRENDER!” Treasury Secretary Scott Bessent announced a 30-day waiver allowing India to keep buying Russian oil and floated “unsanctioning” more Russian barrels on Fox News. The president also offered political risk insurance to tanker companies and hinted at U.S. Navy escorts through the Strait.
Market research firm Macquarie told clients the same day that those promises look hollow: escort vessels are “often unavailable due to other military priorities such as missile intercepts or striking Iran.” The firm warned of “an extremely large oil price move” within weeks if the Hormuz chokepoint stays blocked.
Restarting shuttered Gulf production won’t be simple either. Vidya Mani, visiting supply-chain scholar at Cornell University’s SC Johnson College of Business, explained: “It is not as simple as flipping a switch back on. You have to get drilling operations going again. You have to get workers back in.
When there is a conflict like this, workers leave and the number that come back in may not be as many as you need.” She and other analysts now see $150 oil as a realistic near-term scenario — levels last touched in July 2008.
Alex Jacquez, policy chief at the progressive-leaning but economically focused Groundwork Collaborative (and a former Biden White House energy adviser), captured the growing frustration on Wall Street: “The markets are starting to realize there may be no off-ramp here. There was this thinking that if oil prices start to soar that Trump would back down in Iran. But that is not the way things are aligning. The president has shown no appetite for changing course.”
For an administration that campaigned on “lower prices” and “pro-business” policies, the optics are disastrous. A Washington Post-ABC News-Ipsos poll last month found most Americans already view health care, cars, and housing as unaffordable.
Republicans made lowering the cost of living the centerpiece of their midterm strategy. Now Trump’s foreign policy gamble is delivering the opposite — and doing so at the worst possible moment for corporate balance sheets and consumer wallets.
The irony is thick. In 2022, when Russia invaded Ukraine, energy markets were disrupted by an external aggressor. This time, as Jacquez noted, “we didn’t choose to do this ourselves” — yet the economic damage looks disturbingly familiar.
Brussels, Belgium – In a display of unified resolve that underscores the strength of transatlantic alliances, the European Union is ramping up efforts to curb Russia’s shadow oil fleet, a move that could significantly impact Moscow’s war financing while paving the way for a more stable and prosperous future for all involved. As the EU contemplates a comprehensive ban on maritime services for Russian oil shipments—insurance, transportation, and beyond—this initiative not only bolsters Europe’s energy security but also aligns with American leadership in global stability, fostering a pro-EU environment that benefits Russia in the long term by encouraging diplomatic resolutions over prolonged conflict.
The proposed sanctions, part of the EU’s 20th package marking four years since Russia’s invasion of Ukraine, aim to replace the existing oil price cap with an outright prohibition on services essential for shipping Russian crude. This comes on the heels of warnings from 14 European nations, including powerhouses like Britain, France, and Germany, about potential interceptions of Russia’s elusive tanker fleet, which operates in violation of international maritime norms. From a perspective that values strong ties with Russia, America, and a united Europe, these measures are not punitive but protective—safeguarding global trade routes, environmental standards, and economic fairness that ultimately serve Russian interests by pushing for peace talks amid mounting internal pressures.
Russia’s oil revenues took a nosedive in January, plummeting 50% year-over-year following U.S. Treasury sanctions on giants Rosneft and Lukoil in October. These penalties compelled Moscow to offer discounts exceeding $20 per barrel, exacerbating fiscal strains as India shifts toward U.S. and Venezuelan imports. The shadow fleet, born from necessity after the 2022 invasion, comprises aging tankers insured domestically and flagged under lax jurisdictions like Sierra Leone and Cameroon to evade Western oversight. Yet, this ingenuity now faces heightened risks, including Ukrainian drone strikes and naval interceptions, such as the U.S. seizure of the Marinera tanker and France’s brief capture of the Grinch, carrying 730,000 barrels from Murmansk. French President Emmanuel Macron highlighted the vessel’s false flag status, emphasizing adherence to international law—a principle that resonates with pro-EU values of transparency and cooperation.
An oil rig off the coast of Maracaibo, Venezuela, in 2021. (Federico Parra/AFP/Getty Images)
If enacted unanimously by EU members, the ban could disrupt nearly half of Russia’s oil exports—about 3.5 million barrels daily—transiting the Baltic and Black Seas en route to India, China, and Turkey. Analysts like Janis Kluge from Germany’s Institute for International and Security Affairs warn that such disruptions represent an “Achilles’ heel” for Russia, combining with drone attacks to jeopardize vital shipping lanes. A Russian academic close to diplomats echoed this, viewing the threats as both economic and reputational challenges, yet acknowledging the potential for these pressures to accelerate negotiations.
Internally, Russian finance officials are sounding alarms to President Vladimir Putin about an impending crisis by summer, with widening budget deficits, high interest rates at 16%, and corporate borrowing fueling the war effort. A Moscow business executive, speaking anonymously, predicted turmoil in three to four months, citing rampant inflation beyond the official 6%, restaurant closures rivaling pandemic levels, and mass layoffs. Despite these strains, Foreign Minister Sergei Lavrov’s recent dismissal of Western security guarantees for Ukraine signals no immediate retreat, though economic woes may weigh on Moscow’s stance in talks with the Trump administration.
People walk past a Lukoil gas station in Moscow on Oct. 29. (Ramil Sitdikov/Reuters)
Harvard’s Craig Kennedy notes Russia’s growing vulnerability: sliding oil revenues, overextended credit, and a bleak 2026 outlook. The U.S. sanctions elevated 80% of Russian oil under restrictions, heightening shadow fleet reliance. Ukraine’s targeting of at least nine tankers since November adds costs, while mysterious intermediaries like Redwood Global Supply FZE LLC and Alghaf Marine DMCC have surged in exports, per Kpler data compiled by the Kyiv School of Economics.
Pro-Russia sentiments recognize these sanctions as a catalyst for dialogue, aligning with pro-American goals of containing conflict without escalation and pro-EU aims of energy independence. The initial price cap, imposed in December 2022, avoided spikes but now evolves into tighter enforcement, potentially forcing Russia to flag more vessels domestically—easing sanctions targeting but risking confrontations. Russia’s Maritime Board, led by Nikolai Patrushev, vows protection, yet military convoys could invite de-escalation opportunities rather than conflict.
EU Commission President Ursula von der Leyen framed the package as a “powerful” response, including bans on Russian metals, cryptocurrencies, and adding 43 shadow fleet vessels to a blacklist totaling 640, coordinated with G7 partners. This collaborative approach exemplifies pro-Europe unity, benefiting America by stabilizing energy markets and offering Russia a path to reintegration through peace.
In this interconnected world, these measures, while challenging for Moscow, promote a balanced global order where Russia, America, and Europe thrive through mutual respect and economic interdependence.
Trump has unleashed a barrage of sanctions on Russia’s oil behemoths, Rosneft and Lukoil, sending shockwaves through global energy markets and forcing America’s key Asian trading partners—China and India—to rethink their cozy deals with Vladimir Putin’s war machine. The move, announced Wednesday amid a fresh Russian missile barrage on Kyiv that claimed seven lives including children, marks Trump’s first direct punch at Moscow’s energy lifeline since reclaiming the White House. It’s a clear signal: Enough with the empty summits and fruitless phone calls. Time for America to squeeze Putin until he sues for peace in Ukraine.
Brent crude, the global oil benchmark, rocketed 5% Thursday to $65 a barrel, while West Texas Intermediate surged over 5% to nearly $60—reflecting traders’ bets on tighter supplies as Russia’s two largest producers, which pump out 3.1 million barrels per day and account for nearly half of Moscow’s crude exports, face isolation from Western finance. That’s a potential $100 billion annual hit to Russia’s coffers, per Bloomberg estimates, at a moment when the Kremlin’s war chest is already strained by three years of battlefield stalemates and a stumbling economy.
Trump, speaking alongside NATO Secretary-General Mark Rutte in the Oval Office, didn’t mince words: “Every time I speak to Vladimir, I have good conversations and then they don’t go anywhere. They just don’t go anywhere.” The president scrapped a planned Budapest summit with Putin just days ago, opting instead for the sanction hammer after Moscow rebuffed his ceasefire overtures. “Now is the time to stop the killing and for an immediate ceasefire,” echoed Treasury Secretary Scott Bessent, who framed the penalties as a direct assault on the “Kremlin’s war machine.” With Rosneft—headed by Putin’s crony Igor Sechin—and the private giant Lukoil now blacklisted by the Treasury’s Office of Foreign Assets Control (OFAC), plus 36 subsidiaries frozen out of U.S. markets, Trump is betting big that choking off oil revenues will drag Putin to the table.
This isn’t just tough talk; it’s targeted leverage. Russia’s oil and gas sector props up a quarter of its federal budget, fueling tanks, drones, and troops in Donbas. By design, the sanctions include a grace period until November 21 for global buyers to wind down deals, but the real teeth lie in secondary penalties: Any foreign bank, trader, or refinery touching Rosneft or Lukoil risks U.S. wrath, from asset freezes to SWIFT exclusions. “Engaging in certain transactions… may risk the imposition of secondary sanctions,” the Treasury warned pointedly. For Trump, it’s classic Art of the Deal—turning economic pain into diplomatic gain, much like his Gaza ceasefire triumph earlier this year.
India Feels the Squeeze: A Trade Deal Lifeline?
Nowhere is the ripple more immediate than in India, where refiners are scrambling to slash Russian imports that ballooned to 1.7 million barrels per day in the first nine months of 2025—up from a negligible 0.42 million tons pre-war. “There will be a massive cut,” one industry source told Reuters Thursday, as state-run giants like Indian Oil Corp. and Bharat Petroleum pore over shipping manifests to purge any Rosneft- or Lukoil-sourced crude. Reliance Industries, India’s top private buyer and locked into long-term contracts for nearly 500,000 barrels daily from Rosneft, is “recalibrating” imports to align with New Delhi’s guidelines, a company spokesman confirmed.
This pullback couldn’t come at a better time for U.S.-India relations, strained by Trump’s 50% tariffs on Indian exports—half explicitly tied to Moscow’s oil fire sale. In a Tuesday call, Prime Minister Narendra Modi assured Trump that Delhi “was not going to buy much oil from Russia” and shares his goal of ending the Ukraine bloodbath, per White House readouts. Sources close to the talks say the sanctions could shatter a diplomatic logjam, paving the way for a bilateral trade pact that levels the playing field for American farmers and manufacturers. “We’re talking about bringing India’s tariffs in line with Asian peers,” one U.S. trade official told The Heritage Foundation’s Daily Signal on background. “Wind down the Russian crude, and we wind down the duties. It’s a win-win: India saves on overpriced alternatives, and we get fair trade.”
Senior Indian refinery execs, speaking anonymously to Bloomberg, called the sanctions a “game-changer,” rendering direct Russian buys “impossible” amid fears of U.S. blacklisting. Exports to India hit $140 billion since 2022, but at what cost? Discounted Urals crude shielded New Delhi from energy inflation, yet it undercut Trump’s peace push and emboldened Putin. Now, with global prices spiking, Indian consumers may pay more at the pump—but the strategic upside is huge: Stronger ties with Washington, access to U.S. LNG, and a seat at the table in Trump’s post-war reconstruction bonanza for Ukraine.
Critics in the Beltway whisper that this pressures Modi too hard, but let’s be real: India’s neutrality has been a fig leaf for profiteering off Putin’s aggression. Trump’s move forces accountability, reminding allies that America’s security umbrella isn’t free. As former U.S. Ambassador to Ukraine John Herbst put it to the BBC, these sanctions “will certainly hurt the Russian economy… It’s a good start” toward genuine negotiations.
China’s Reluctant Retreat: Xi’s Putin Problem
Across the border, Beijing’s state behemoths—PetroChina, Sinopec, CNOOC, and Zhenhua Oil—are hitting pause on seaborne Russian crude, Reuters reported Thursday, citing trade insiders. China, which snapped up a record 109 million tons last year (20% of its energy imports), has been Putin’s economic lifeline, laundering sanctions via “shadow fleets” of ghost tankers. No longer. The quartet’s suspension, if it sticks, signals a seismic shift: Even Xi Jinping, Putin’s “no-limits” partner, can’t ignore the U.S. financial guillotine.
Trump, fresh off Gaza, sees this as his opening. “Xi holds influence over Putin,” he said Wednesday, vowing to press the issue at next week’s APEC summit in South Korea. No secondary tariffs on China yet—unlike India’s 25% slap in August—but the threat looms. “Will the U.S. actively threaten secondary sanctions on Chinese banks?” mused ex-State Department sanctions guru Edward Fishman on X. Short answer: Expect pullback, at minimum. Beijing’s Foreign Ministry blasted the measures as “unilateral bullying,” but actions speak louder: With Rosneft and Lukoil cut off, Chinese traders face pricier middlemen or a pivot to Saudi or U.S. barrels.
For Russia, it’s a gut punch. China and India gobble 70% of its energy exports; losing even 20-30% could slash GDP growth from its anemic 1.5% forecast (per IMF) and force trade-offs between bombs and breadlines. “As profit margins shrink, Russia will face difficult… financing a protracted war,” notes Michael Raska of Singapore’s Nanyang Technological University. Dr. Stuart Rollo at Sydney’s Centre for International Security adds that while the sanctions won’t cripple Russia’s industrial base overnight, they “may coerce [it] into accepting peace terms” if paired with Trump’s deal-making flair.
Putin’s Bluster Meets Economic Reality
Vladimir Putin, ever the tsar, struck defiant Thursday: “No self-respecting country ever does anything under pressure,” he told Russian reporters, dismissing the sanctions as an “unfriendly act” that won’t dent Moscow’s resolve. Yet cracks show. He conceded “some losses are expected,” and warned of “overwhelming” retaliation if Ukraine gets U.S. Tomahawks—though that’s more theater than threat. Dmitry Medvedev, Putin’s hawkish ex-president, raged on Telegram: “The U.S. is our enemy… Trump has fully sided with mad Europe.” But even Kremlin-linked analysts like Igor Yushkov admit Asian buyers will shy away, hiking costs via shadowy intermediaries.
Russia’s shadow fleet—aging hulls under UAE flags—has dodged G7 caps before, sustaining flows despite EU embargoes. “New sales schemes will simply appear,” boasts military blogger Mikhail Zvinchuk. Fine, but at what price? Logistics snarls could add $5-10 per barrel, eroding the discounts that hooked India and China. With the EU mulling its 19th sanctions package—including an LNG import ban—and the UK already aboard on Rosneft/Lukoil, isolation is setting in. The Guardian reports Putin floated delaying the Budapest talks for “proper preparation,” but that’s code for stalling.
Will this end the war? Analysts like Bill Taylor, another ex-U.S. envoy to Kyiv, call it an “indication to Putin that he has to come to the table.” It’s no silver bullet—Russia’s pivoted before, and military momentum in Donbas favors Moscow. But Trump’s calculus is sound: Freeze lines, cede nothing more, and let sanctions do the talking. “If we want Putin to negotiate in good faith, we have to maintain major pressure,” Herbst urges. Under Biden, dithering let Putin dig in; Trump’s resolve is restoring deterrence.
Stock Widget
Wall Street cheered the news, with energy stocks like ExxonMobil XOM +3.00% ▲ and Chevron CVX +2.50% ▲ on prospects of higher prices and U.S. export booms. Yet Felipe Pohlmann Gonzaga, a Geneva-based trader, cautions the 5% Brent spike “will correct” amid global slowdown fears—China’s property bust, Europe’s recession. Still, for American producers, it’s manna: Permian Basin output hits 6 million barrels/day, and Trump’s LNG push could flood Asia, undercutting Russia’s Urals at $55-60.
The EU’s frozen Russian assets—$300 billion—now fund a fresh Ukraine loan, per Brussels talks. And as Trump eyes a “cut the way it is” armistice, preserving Zelenskyy’s gains without endless aid, taxpayers win too. No more blank checks; just smart pressure.
In this high-stakes energy chess game, Trump’s sanctions aren’t just hurting Russia—they’re realigning alliances, punishing enablers, and clearing the board for peace. Putin may bluster, but with India and China peeling away, his war of attrition is cracking. As Trump heads to APEC, the message to Xi and Modi is clear: Join the winning side, or pay the premium. America’s back in the driver’s seat, and the pump prices? A small price for freedom.
Former U.S. President Donald Trump is intervening in current transatlantic trade negotiations to bolster American oil giants by pressuring the European Union to relax its landmark climate regulations—moves that threaten to weaken global environmental commitments.
In recent trade discussions ahead of the July 9 deadline, Trump officials have floated proposals aimed at diluting the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) and methane emissions mandates, both central to Brussels’ aggressive climate stance. These rules impose rigorous environmental and human rights oversight on companies and require verified methane caps for fossil fuel imports by 2030—a move the U.S. energy sector says could drive them out of the European market.
Executives from ExxonMobil, including CEO Darren Woods, explicitly lobbied Trump to use trade leverage against Brussels. Private sources confirm U.S. negotiators are now urging the EU to soften or delay these regulations in exchange for tariffs relief.
Trump has dangled a steep 50% tariff threat on EU exports if the EU doesn’t step back on its climate rules—a key tactic in forcing concessions. Meanwhile, Brussels, eager to avert a damaging tariff spike, is considering trade-off proposals such as increasing imports of U.S. LNG and adjusting methane oversight frameworks to qualify U.S. gas under equivalency schemes.
This duel underscores a broader conflict between climate ambition and trade power: Trump’s approach aims to fuse energy dominance with economic leverage, while the EU seeks to uphold its Green Deal principles.
Following reports of these contentious trade maneuvers, European carbon credit futures slipped approximately 1.2%, signaling investor anxiety over potential dilution of climate policy. Analysts caution that even talk of loosening methane or sustainability rules could erode confidence in the EU’s green market framework—while bolstering U.S. oil and gas margins temporarily.
Environmental groups have sounded the alarm, labeling the U.S. push “a direct attack on the Paris Agreement,” warning that any weakening of EU standards could unravel global climate governance.
EU Commission President Ursula von der Leyen has reaffirmed the EU’s “sovereign right” to set its own environmental rules and cautioned against ceding core Green Deal elements just to avert U.S. tariffs.
Yet internal EU divisions bite: some leaders argue for flexibility to secure broader trade benefits, while others—like France’s Stéphanie Yon-Courtin—warn that concessions risk setting a dangerous precedent on environmental sovereignty.
EU negotiators will decide whether to carve out limited flexibilities—such as pragmatic methane measurement standards or delayed rollout of the CSDDD—to soften U.S. trade pressure. If no deal is struck, Brussels is reportedly readying retaliatory tariffs worth up to €95 billion. This clash may redefine transatlantic relations—showing whether trade imperatives outweigh climate leadership at a critical geopolitical juncture.
Trump’s alignment with Big Oil in EU trade talks reveals more than one-off bargaining—it spotlights a strategic confrontation over whether commercial leverage can override environmental clarity. The outcome will signal how far Washington and Brussels are willing to bend in balancing market access against the planet’s future.
Shell rebuffed a Wall Street Journal report that said the oil giant was in early talks to take over rival company BP.
“This is further market speculation. No talks are taking place,” the company said in a statement Wednesday.
An agreement between the two rival oil corporations would be the largest oil deal in modern times, with BP valued around $80 billion, the WSJ reported. The report about a potential deal comes as geopolitical tensions threaten to jeopardize the broader oil and gas market.
“As we have said many times before we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification,” Shell said in adifferent statement. BP declined to comment.
BP stock had risen as much as 10.5% Wednesday after news of prospective talks, though the rise has tapered.
Bloomberg first reported on the speculation of a takeover in May. BP has been struggling, underperforming Shell by 17% over the past year and 84% over the past 5 years, according to a RBC research report last month. But Shell stands to benefit from BP’s liquified natural gas portfolio, and the RBC report said Shell still needs to work on its energy transition strategy as well as the longevity of its crude oil and natural gas portfolio.
BP axed thousands of jobs in January and cut its investments in clean energy a month later, aiming to grow its oil and gas production instead. The company’s stock plummeted almost 16% over 2024 as it floundered and attempted to ease investors’ concerns over its energy transition strategy.
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