After nine months of attempting to coax Russia into concessions using only incentives – whether by holding talks on repairing diplomatic relations or hosting a major bilateral summit on US soil – the Trump administration in an unexpected reversal announced “massive sanctions” Wednesday on Moscow’s two biggest oil producers.
Just one week earlier, President Donald Trump had backed away from supplying long-range Tomahawk missiles to Ukraine after a phone call with Russian President Vladimir Putin, who secured an invitation to a second bilateral summit, this time in Budapest.
Secretary of State Marco Rubio, among the more hawkish members of Trump’s Cabinet regarding Ukraine, was tasked with preparing that summit. But Russia’s uncompromising insistence on addressing what it sees as the “root causes” of the conflict finally hit home at the White House. Trump didn’t want to “waste time” at another summit, he said Wednesday, though he left the door open, suggesting that “we’ll do it in the future.”
Trump’s frustration with Russia had clearly been growing in recent months, as it became clear that his much-touted Alaska summit had failed to stop escalating violence in Ukraine. He even shifted his position on Ukrainian strikes deep inside Russia, increasing intelligence sharing to help Kyiv target military and energy facilities, sources told CNN last week.
And yet after multiple threats from Trump to ramp up sanctions against Moscow failed to materialize, and with the call between the two presidents last week suggesting the US leader was still susceptible to Russian persuasion, Wednesday’s move to sanction the Russian oil giants and their subsidiaries blindsided experts.
“It was actually surprising simply because there was always a discrepancy between Trump’s rhetoric and actions,” said Maria Shagina, a senior fellow at the London-based International Institute for Strategic Studies (IISS), in written comments to CNN.
“It seems that today Russia has overplayed its hand, and Trump’s patience is wearing thin,” she wrote.
How painful this will be for Russia is something that experts and energy markets are still trying to decipher.
This is the first time Trump has imposed direct sanctions on Russia since he returned to office in January, though in August, his administration declared punishing secondary tariffs on India for its purchases of Russian oil.
The sanctions are typical in the sense that the companies listed – Rosneft and Lukoil, along with dozens of subsidiaries – will have their assets frozen in the United States, and US entities will be banned from doing business with them. Yet most experts agree that targeting Rosneft and Lukoil represents a significant change. Together, the two companies account for about half of Russian oil exports, according to RBC Capital Markets.