Monday, February 17, 2025

Trump’s Saudi Oil Gambit: Checkmating Russia to End the Ukraine War

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Donald Trump promised to end the Ukraine War upon assuming office. And his recent sharp rebuke to Saudi Arabia over oil prices is part of fulfilling this promise. However, it also reignites the global conversation about the role of energy in geopolitics. By targeting the cornerstone of Russia’s economy – its energy exports – Trump signals a strategy to bring the Ukraine war to an end.

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While Trump asserts that Ukraine is ready for peace, the specifics of these terms remain unclear. Russia, on the other hand, continues to leverage its energy dominance and military positioning to dictate the terms of engagement. This unfolding geopolitical chess game could have significant implications not only for Europe but also for Bharat, whose energy security and economic stability are closely tied to global oil dynamics.

Opening Moves: Saudi Arabia’s Oil Pricing in Trump’s Strategy

Saudi Arabia Oil Exports valued at $211.54 billion in 2023 - TradeImeX Blog | Global Trade market information
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Saudi Arabia’s influence over global oil prices is unmatched. Trump’s public rebuke suggests he is pressuring Riyadh to adopt policies that would destabilize Russia’s energy revenues. By urging an increase in oil production or a reduction in prices, Trump aims to create a surplus of oil production in the world.

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Thus, Trump aims to drastically lower global oil prices, slashing Russia’s primary source of income.

Russia oil exports a total value of $133 billion - TradeImeX Blog | Global Trade market information
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Historically, this strategy has a successful precedent. In the 1980s, during the Cold War, the US successfully collaborated with Saudi Arabia to flood the market with oil, driving down prices and collapsing the Soviet Union’s economy. Russia today faces a similar risk.

Visualizing the $105 Trillion World Economy in One Chart
PC Visual Capitalists – Russian Economy vs the World

With energy exports contributing over 40% of its federal budget, any sustained drop in oil prices would create significant economic strain on Putin’s Russia.

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For Bharat, the implications of such a move are twofold. Cheaper oil would ease its import burden, lower inflation, and create fiscal space for growth-oriented policies. However, Bharat’s economy may suffer as it also exports Russian oil to other nations. This could lead to volatility in energy markets and an economic reshuffling, where India has significant strategic interests.

Midgame: Peace Terms and the Broken Spring 2022 Treaty

Trump’s declaration that Ukraine is prepared for peace begs the question: what concessions is Kyiv willing to make? The Spring 2022 Treaty, an initial framework for peace, outlined several key conditions: Ukraine’s neutrality, recognition of Crimea as part of Russia, and autonomy for Donetsk and Luhansk. However, to NATO these terms were seen as favorable to Russia.Thus, Western powers’ influence on Ukraine led to the treaty’s collapse and war to continue unabated.

For Russia, the terms of the truce need to be acceptable, with additional guarantees on NATO’s non-expansion and Ukraine’s demilitarization.

Ukraine, however, is now a pawn in the hands of Western powers. President Zelensky is suspected of embezzlement and power-mongering! Emboldened by Western military aid and geopolitical support, Zelenksy refused the 2022 Treaty at an immense political cost to Ukraine.

Trump’s intervention could potentially force Ukraine to abandon NATO aspirations in exchange for a ceasefire, a move that would be framed as a win for Russian diplomacy.

For Bharat, these developments are critical. As Bharat walked the tightrope of neutrality during the war, it would welcome an end to hostilities. However, it must also prepare for the political and economic shifts that would follow such a peace. A demilitarized Ukraine would alter Europe’s security architecture. There might be new trade and investment opportunities for India while reshaping its partnerships with both Russia and the West.

Endgame: Is Russia Cornered, or in Control?

Despite economic sanctions and military resistance, Russia remains a formidable player in this geopolitical game. Its pivot to alternative markets in Asia, including Iran, India, and China, has allowed it to weather Western sanctions. Moscow’s ability to maintain energy revenues through discounted oil sales to non-Western countries demonstrates its resilience.

Trump’s oil gambit, however, seeks to exploit Russia’s Achilles heel of energy exports.

However, Russia’s economic model is heavily reliant on high oil prices. Therefore, a prolonged slump in it could weaken Putin’s ability to sustain the war effort. Saudi Arabia’s cooperation, or lack thereof, will be crucial. If Riyadh resists Trump’s pressure, Russia could maintain its current trajectory and serve defeat to both Trump and Ukraine.

If Saudi Arabia complies, Moscow may face significant financial challenges, forcing it to reconsider its position in the conflict.

For Bharat, the stakes are equally high. While discounted Russian oil has been a boon for India’s economy, a sharp drop in global oil prices could disrupt these arrangements. Additionally, the rebalancing of global power dynamics could affect India’s strategic autonomy. India’s ability to navigate these challenges will determine its role as a key player in the new geopolitical order.

Final Moves: Lessons from History and India’s Strategic Play

History has shown that oil is not just a commodity but a weapon of power. During the Cold War and the Ukraine War, oil prices are essential to the outcomes of the Ukraine War. Trump’s strategy follows the lessons served to the Soviet Union by the US, but the global landscape has changed. Unlike the 1980s, Russia today has diversified its alliances and strengthened its economic defenses.

For Bharat, the Saudi-Trump-Russia dynamic presents both opportunities and challenges.

Cheaper oil imports could bolster India’s economic growth in one way but it will also hamper its profits gained via refined oil exports. Thus, Bharat must be prepared for the ripple effects of a shifting geopolitical landscape. India’s strategic autonomy will be tested as it balances its relationships with Russia, the West, and West Asia.

Trump’s attempt to manipulate oil prices to end the Ukraine war is a bold move in a high-stakes geopolitical chess game.

While it could corner Russia economically, it also risks destabilizing global energy markets. For Bharat, the game is about more than oil – it’s about securing its strategic interests in a rapidly changing world. As the pieces move, India must play its hand carefully, ensuring it emerges as a key player, not a pawn, in this evolving global order

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