On Tuesday, US President Trump stated that the Russian economy is “very bad” and that the drop in oil prices will severely impact the country’s war machine reliant on oil revenue.
During an interview with CNBC’s “Squawk Box” program, Trump discussed the impact of oil prices on Russian President Putin’s war policy. He remarked, “If the price of oil drops another $10 per barrel, Putin will stop the killing. He has no choice because his economy is in a bad shape.”
At the time of these remarks, Trump was exerting pressure on Russia, demanding Putin to agree to end the war with Ukraine before the deadline he set, or face new sanctions. The initial deadline, which was set over 50 days ago, was shortened to 10 days from July 29 due to Putin’s position.
Moreover, on August 1, Trump ordered the deployment of two nuclear submarines in response to “provocative remarks” made by Dmitry Medvedev, Russian Deputy Chairman of the Security Council and former president of Russia, on social media.
Russia, being one of the world’s largest oil-exporting countries, heavily relies on oil export revenue to fund its war machine since the invasion of Ukraine in 2022. Ukraine’s Western allies have tried to curb these revenues through sanctions and restrictions, while countries like India and China continue to purchase Russian oil at discounted prices.
This has angered Trump, who warned last week that if India doesn’t cease buying Russian oil, the US will impose tariffs of up to 25%. He also accused India of buying discounted Russian oil and “selling it at a high price in the open market to make huge profits.”
During his CNBC interview on Tuesday, Trump mentioned the possibility of raising the tariff threshold on India to over 25% within the next 24 hours because they are buying Russian oil, thereby fueling the war machine.
After Trump’s statements on Tuesday, Brent crude futures fell by 83 cents to $67.92 per barrel, a decrease of 1.2%; US West Texas Intermediate crude also dropped by 87 cents to $65.41 per barrel.
(Reference: CNBC)