Hello! Welcome to your weekly guide to the Russian economy, written by Alexander Kolyandr and Alexandra Prokopenko and brought to you by The Bell. This week we analyze the possible impact of Donald Trump’s sanctions on Russian oil majors, Rosneft and Lukoil. We also cover the central bank’s cautious rate-cut and stagflationary forecasts.
For the first time since his return to the White House, U.S. President Donald Trump imposed new sanctions on Russia. In a serious move that significantly increases the cost of Russia’s refusal to end the war, Washington hit Rosneft and Lukoil with sanctions — a move that even his predecessor Joe Biden had refrained from. However, it’s still unlikely to force Vladimir Putin to the negotiating table right away. How much Putin can be swayed will likely be determined by how effectively the sanctions are enforced, how quickly Russia can find work-arounds, and whether Washington can intimidate Moscow’s allies enough to distance themselves from the Kremlin.
Why did Trump U-turn?
It emerged in Transatlantic talks on Tuesday that all may not be rosy in the Trump-Putin relationship, following the pair’s surprise announcement of an upcoming summit in Budapest. A day later, Trump publicly canceled it, only for the US Treasury to follow by adding Rosneft, Lukoil, and 34 of their subsidiaries to its sanctions list.
