Can energy markets eat secondary tariffs on Russia?

In light of President Trump's announcement of a reduced deadline of 10 to 12 days for Russia to make progress towards ending the war in Ukraine, we are re-sending this Update assessing the implications of secondary tariffs on buyers of Russian energy.

If President Trump follows through on his threat to impose secondary tariffs on buyers of Russian energy, leading to a sharp drop in Russian energy flows, it would invariably lead to higher global energy prices. The impact would probably be greater on natural gas prices than oil, depending on to what extent OPEC+ would step in and plug the shortfall in oil supply. That could cause severe fiscal strains for Russia, but Putin’s actions so far suggest that spending on the military might be prioritised over other spending.