- “The war with Russia is not won in specified a way that it is undermined economically in the long term. You just gotta do it with a fast and strong hit to the point. And this point could actually be oil prices, says Stodolak
- In 2022, the G7 countries set a Russian oil price limit of $60 per barrel. “Was this limit not enforced and Russia was able to sale oil more costly than $60?” wonders the economist.
- “ Americans can carry out their threats. This is simply a substance of political will. If there is simply a country that can effectively enforce economical sanctions, it is the United States, says an analyst. And he gives an example of the force on Mexico
- More crucial information can be found on the Onetu homepage
— I intend to address Saudi Arabia and OPEC (the organisation of oil exporting countries) to lower oil prices. If that happens, the war in Ukraine will end immediately — said Donald Trump in a speech addressed to guests of the Davos economical Forum.
Is there truly a recipe for ending war?
Vice president of the Warsaw Enterprise Institute, economical Publicist, diary of Legal Newspapers Sebastian Stodolak recalls that last December, British economist and Nobel laureate Simon Johnson and economical advisor to president Zelenski Oleg Ustenko gave a simple relation between the fall in oil prices and the end of the war in Ukraine. Unlike Trump, however, they did not mostly say "about lowering oil prices", they referred to the Russian issue.
Russian economy moving due to the fact that it stands on war tracks
"On Trump's first day of office, he may announce that he will impose severe US sanctions on any company that pays more than $15 per barrel of Russian oil and anyone who participates in any transaction above that level," they wrote in December.
— How can Trump rapidly end the war? That's precisely what Simon and Ustenko's article said that hitting oil prices could lead to the end of the war. This thought is due to the fact that the erstwhile sanctions have clearly not been effective in reducing military capabilities adequate to halt Russia from succeeding on the front, says Stodolak.
— The Russian economy, of course, is not well within the knowing of a healthy economy. She's moving due to the fact that she's switched to war mode. However, there are studies that show that she was nevertheless able to adapt adequate to the situation to avoid falling into a recession. 2024 Russia ended on an economical plus in terms of GDP growth, like an analyst.
Stodolak, however, points out that “the real economical activity in Russia is not the highest”. I mean not war, but civilian economical activity. There is no capital, there are very advanced interest rates at very advanced inflation. You don't invest there by force. Long-wavely this economy is weakened and the foundations of growth are undermined, he says.
How much is Russia selling its oil for?
He says: “But we have a war. And war with Russia is not won in specified a way that it is undermined economically in the long term. You just gotta do it with a fast and strong hit to the point. And that point could actually be oil prices.
According to U.S. Newsweek, the Russian oil and gas sector represents a crucial part of the country's economy, accounting for a large part of its exports and in 2023 it accounted for over 30% of the budget.
In 2022, the G7 countries set a Russian oil price limit of $60 per barrel. “ Was this limit not enforced and Russia was able to sale oil more costly than $60? ” asks Stodolak.
“ Trump was not precise in his performance in Davos. possibly he means more pointy sanctions, i.e. oil could be more costly in the planet market, but those who trade with Russia would be put against the wall and could buy oil from it only at a much lower price, says the economical writer “Journal of Legal Newspapers”.
America can scare
Is that possible? How can America make India and China buy oil from Russia at a much lower price? “It seems simple, but only from a point of view that does not take into account certain political nuances. On the another hand, we know that sanctions as a scarecrow work. An example of Mexico, which inactive during Trump's first word was threatened by very advanced duties if it did not halt the flow of people from South America through Mexico trying to get to the States. In fact, this bogeyman worked, although only temporarily, as the Barn says.
“ Americans can carry out their threats. This is simply a substance of political will. If there is simply a country that can effectively enforce economical sanctions, that is the United States, he adds.
Stodolak notes that "Trump already scares China". “ Trump has already said that he will rise or impose duties on Chinese goods. This is very bad news for China. This economical weapon is already in use. The question is, will Trump besides start utilizing it in the context of Chinese-Russian relations, utilizing the argument that China should halt dealing economically with Russia?
War is based on oil. “The dog is lying”
The Russians, of course, see differently. Kremlin spokesperson Dmitri Pieskov responded present to Trump, stating that the war in Ukraine does not depend on oil prices.
— The share of fossil fuel revenues in Russia's budget revenues has indeed fallen in the last 2 years. It's not like they're as dependent on those fuels as they were at the start of the war. But it's inactive large money, very crucial to the Russian budget. Doggy lies, saying the war doesn't depend on it. The war depends on it, for example, due to the fact that the Russian army needs not only oil money, but besides oil,” comments Stodolak.
— It may be precisely with the introduction of specified sanctions that Russia will be able to direct oil only and only to the flank of war, due to the fact that it will not be able to sale it elsewhere, or it will gotta sale very cheaply. Only then, without the influence of selling it, she will have no money to pay her soldiers. Will lowering oil prices end the war in 1 day? Of course not. The war may not end at all, but it may change the negotiating situation in favour of Ukraine,” the analyst points out.
