Oil Markets Gauge the Credibility of Trump’s Russian Oil Tariff Threat

Market Reactions Reflect Skepticism Amid Frequent U.S. Policy Shifts

By Siyi Liu and Lewis Jackson
March 31, 2025 | Beijing

Oil markets exhibited restraint on Monday despite U.S. President Donald Trump’s latest threat to impose substantial tariffs on Russian oil imports, as traders and analysts weighed the credibility of his remarks against the backdrop of frequent policy shifts from the White House.

Trump’s proposal—suggesting a 25% to 50% tariff on countries purchasing Russian oil—would significantly impact global oil flows if enacted. However, industry experts remain skeptical about the seriousness of the threat, given past instances where similar warnings failed to materialize into concrete policy.

Market Response: Limited Impact on Prices

Crude prices showed only marginal movement following Trump’s remarks. As of 0028 GMT, Brent crude futures for June delivery edged 0.2% lower to $72.59 per barrel, while U.S. West Texas Intermediate (WTI) crude declined 0.3% to $69.18 per barrel.

The subdued reaction underscores growing fatigue among traders regarding unpredictable U.S. trade and sanctions policies.

“There’s an element of fatigue with the announcements from the U.S. administration on tariffs and sanctions,” said Warren Patterson, Head of Commodities Strategy at ING.
“Until we see a concrete policy directive, the market is unlikely to overreact.”

Key Players: China and India in Focus

China and India—two of the largest buyers of Russian crude—would play a crucial role in determining the impact of any secondary sanctions targeting Moscow’s oil exports.

Recent U.S. sanctions on Russia have already led some Chinese state-owned oil companies to scale back their purchases. Sinopec and Zhenhua Oil halted imports, while two other major players reduced volumes as they assessed compliance risks.

However, Trump’s latest threat appears to have little immediate impact on Chinese traders, many of whom have become increasingly desensitized to his frequent geopolitical brinkmanship.

“We’re all numb now. Oil prices are not reacting,” said one anonymous Chinese oil trader.

“It’s difficult to gauge the real impact because Trump often bluffs. His words have lost credibility,” added another.

Potential Market Implications

Should the tariff threat materialize into an enforceable policy, industry analysts will closely monitor:

• Enforcement mechanisms—whether the U.S. will actively pursue penalties against non-compliant nations.
• OPEC’s response—the Organization of the Petroleum Exporting Countries (OPEC) may consider adjusting production levels to offset potential disruptions in Russian crude supply.

The secondary sanctions recently imposed on Venezuelan oil could serve as a template for how markets might react to a similar policy against Russia.

In anticipation of upcoming U.S. restrictions on Venezuelan crude, Chinese buyers have already paused purchases, awaiting further clarity on enforcement. Many analysts expect transactions to resume as traders explore alternative channels unless Beijing imposes a blanket ban.

While uncertainty lingers, market participants remain cautious, watching for tangible policy actions rather than responding to speculative rhetoric.