Russia Slashes Energy Revenue Outlook as Oil Prices Collapse and Budget Deficit Widens

Commodity

Summary:

Russia has revised down its 2025 oil and gas revenue forecast by 24%, citing plunging oil prices and market instability, with projected oil income now expected to account for just 3.7% of GDP...

Falling oil prices prompt fiscal recalibration

In response to the sharp decline in global oil prices since early April, Russia’s Ministry of Finance has significantly revised its revenue outlook for 2025. The government now expects to earn approximately $101.7 billion (8.32 trillion rubles) from oil and gas, a notable 24% drop from the earlier forecast of $133.7 billion (10.9 trillion rubles). This adjustment reflects the urgent need to realign fiscal expectations with market realities, as Urals crude—Russia’s key export blend—has plunged to near $50 per barrel.

The revised outlook also reveals a substantial decline in the expected contribution of oil and gas to the country’s GDP. Energy revenues are now projected to account for only 3.7% of Russia’s GDP in 2025, down from the previously anticipated 5.1%. This signals not only a loss in revenue but also a reduced fiscal cushion at a time when government spending—particularly related to the war in Ukraine—is rising.

Budget deficit forecast triples amid revenue shortfall

Accompanying the downgrade in energy revenue is a sharp upward revision to Russia’s expected budget deficit. The Finance Ministry now projects a deficit of 1.7% of GDP for 2025, a dramatic increase from the earlier 0.5% estimate. This tripling of the deficit highlights the growing imbalance between state spending and income, especially as oil prices remain under pressure.

This outcome underscores a relationship where the drop in global oil prices (A) directly leads to lower government income (B), thereby necessitating increased borrowing or spending cuts. The causal link here is strong and direct, given the centrality of hydrocarbons to the Russian budget.

Brent volatility and OPEC+ uncertainty weigh on Russian oil

Over the past month, oil prices have declined by roughly $10 per barrel. On Thursday morning, Brent crude was hovering near $60 per barrel—a far cry from the levels that once buoyed Russia’s fiscal confidence. Contributing to this downturn are global trade tensions, weak demand projections, and Saudi Arabia’s suggestion that it could ramp up production more quickly than expected, even at the expense of lower prices.

As a member of OPEC+, Russia is directly exposed to these market movements. Compounding the challenge is the discounted price at which Russian crude is being sold due to Western sanctions. These discounts widen the gap between Brent and Urals crude, squeezing Russia’s margins and limiting its ability to benefit even from modest market rallies.

Impact on the broader Russian economy

The mounting pressure on energy revenues poses deeper risks for Russia’s macroeconomic stability. Central Bank Governor Elvira Nabiullina warned last month that the sustained lower selling price of Russian oil could have a detrimental impact on the broader economy. She specifically noted that continued trade war escalations could suppress global trade volumes and energy demand, thereby worsening Russia’s fiscal vulnerabilities.

The link between falling oil prices and overall economic performance in Russia is both correlative and causal. Not only do oil revenues fund a large share of government spending, but they also underpin broader economic confidence, exchange rate stability, and investment flows. A protracted period of subdued prices could therefore result in contractionary ripple effects across sectors beyond energy.

Geopolitical burdens and structural strain

In parallel with declining revenues, Russia’s fiscal pressures are aggravated by its ongoing war in Ukraine. Military expenditures have surged, making the economy increasingly dependent on stable oil revenue. The sanctions regime imposed by Western countries has forced Russia to find alternative markets, often at steep discounts, exacerbating its budgetary strain.

This scenario reflects an adverse combination: rising outflows and falling inflows. The mismatch is structural, not temporary, and may lead to difficult decisions in 2025—ranging from currency interventions to possible spending cuts or debt issuance. The risk that this gap might grow further if global oil markets remain depressed is significant.

A fragile energy-dependent economy under duress

Russia’s sharp downward revision of its energy revenue forecast reveals the fragility of an economy still deeply reliant on oil and gas. The link between oil prices and fiscal health remains direct and potent. While global market forces and geopolitical uncertainty continue to shape price volatility, Russia's ability to cushion its economy is weakening.

Without a rebound in oil prices or a geopolitical breakthrough that eases sanctions and stabilizes demand, Moscow may face widening deficits and deteriorating economic performance in the coming year. The correlation between oil price collapse and fiscal vulnerability in Russia is now more than a pattern—it is becoming a structural constraint on the Kremlin’s strategic ambitions.

Source: OilPrice

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Commodity

Russia-Ukraine Conflict

U.S. officials have finalized new economic sanctions against Russia, including banking and energy measures, to intensify pressure on Moscow to embrace U.S. President Donald Trump’s efforts to end its war on Ukraine, according to three U.S. officials and a source familiar with the issue.

The targets include state-owned Russian energy giant Gazprom and major entities involved in the natural resources and banking sectors, said an administration official, who like the other sources requested anonymity to discuss the issue.

The official provided no further details.

It was far from clear, however, whether the package will be approved by Trump, whose sympathy for Moscow's statements and actions have given way to frustration with Russian President Vladimir Putin’s spurning of his calls for a ceasefire and peace talks.

The U.S. National Security Council “is trying to coordinate some set of more punitive actions against Russia,” said the source familiar with the issue. “This will have to be signed off by Trump.”

“It’s totally his call,” confirmed a second U.S. official.

“From the beginning, the president has been clear about his commitment to achieving a full and comprehensive ceasefire," said National Security Council Spokesman James Hewitt. "We do not comment on the details of ongoing negotiations.”

The U.S. Treasury, which implements most U.S. sanctions, did not respond to a request for comment.

An approval by Trump of new sanctions, which would follow the Wednesday signing of a U.S.-Ukraine minerals deal that he heavily promoted as part of his peace effort, could signify a hardening of his stance towards the Kremlin.

Since Russia launched its full-scale invasion of Ukraine in 2022 the United States and its allies have added layer upon layer of sanctions on the country. While the measures have been painful for Russia's economy, Moscow has found ways to circumvent the sanctions and continue funding its war.

Trump "has been bending over backwards to give Putin every opportunity to say, 'Okay, we're going to have a ceasefire and an end to the war,' and Putin keeps rejecting him," said Kurt Volker, a former U.S. envoy to NATO who was U.S. special representative for Ukraine negotiations during Trump's first term. "This is the next phase of putting some pressure on Russia."

"Putin has been escalating," he continued. Trump "has got the U.S. and Ukraine now in alignment calling for an immediate and full ceasefire, and Putin is now the outlier."

Since assuming office in January, Trump has taken steps seen as aimed at boosting Russian acceptance of his peace effort, including disbanding a Justice Department task force formed to enforce sanctions and target oligarchs close to the Kremlin.

He also has made pro-Moscow statements, falsely blaming Ukrainian President Volodymyr Zelenskiy for starting the conflict and calling him a "dictator."

Meanwhile, Steve Witkoff, Trump’s special envoy, has advocated a peace strategy that would cede four Ukrainian regions to Moscow, and has met Putin four times, most recently last week.

But three days after that meeting, Russian Foreign Minister Sergei Lavrov reiterated Putin's maximalist demands for a settlement and Moscow’s forces have pressed frontline attacks and missile and drone strikes on Ukrainian cities, claiming more civilian casualties.

Reuters reported in March that the United States was drawing up a plan to potentially give Russia sanctions relief but Trump in recent weeks has expressed frustration with Putin's foot-dragging on ending the invasion and last Saturday held a "very productive" one-on-one meeting in the Vatican with Zelenskiy.

The next day, Trump said in a post on his Truth Social platform that he was “strongly considering large scale Banking Sanctions, Sanctions and Tariffs on Russia” that would remain until a ceasefire and final peace deal.

Volker said that Russia has been earning hard currency that funds its military through oil and gas sales to countries like India and China and that it would be "very significant" if Trump slapped secondary sanctions on such deals.

Secondary sanctions are those where one country seeks to punish a second country for trading with a third by barring access to its own market, a particularly powerful tool for the United States because of the size of its economy.

Source: Reuters

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China–U.S. Trade War

Economic

Signals of diplomatic recalibration

On May 2, China’s Ministry of Commerce released a carefully worded statement confirming that it had observed repeated efforts by senior U.S. officials to initiate dialogue on tariffs. This comes after years of economic confrontation that intensified under the Trump administration, particularly with the dramatic escalation of tariffs that pushed rates as high as 145% on certain Chinese goods. In retaliation, Beijing imposed tariffs of up to 125% on American imports, further entrenching the dispute.

While the current U.S. administration has maintained a portion of these trade barriers, new developments indicate that Washington may be reassessing its approach. According to sources close to Chinese state broadcaster CCTV, the U.S. has proactively reached out through multiple channels to explore possible de-escalation, marking a subtle yet meaningful shift in tone.

China’s firm position: Tariff rollback as a precondition

Beijing’s reaction has been measured but resolute. A spokesperson from the Ministry of Commerce emphasized that any movement toward serious negotiation would require the United States to first demonstrate “sincerity” by reversing what China considers wrongful actions—specifically the imposition of unilateral tariffs. The message is clear: while China is open to dialogue, it insists that such talks must be grounded in reciprocity and fairness.

This stance reflects a conditional framework rather than an outright refusal. It suggests a correlation, not necessarily a direct causation, between Washington’s willingness to remove tariffs and Beijing’s readiness to engage. In other words, removing tariffs may not guarantee progress, but it is a necessary precondition to unlock the next phase of talks.

Economic pressure and selective exemptions

Despite the protracted conflict, both governments have taken steps to mitigate domestic economic damage by issuing exemptions on select key goods. These carve-outs reveal a mutual understanding of the practical limits of a prolonged tariff war, particularly as global supply chains remain under strain from post-pandemic disruptions and geopolitical uncertainties.

The exemptions also signal a nuanced economic strategy. Rather than a blanket retreat from confrontation, both sides have selectively shielded industries deemed critical to domestic economic health. This shared behavior indicates a convergence in policy rationale, if not in diplomatic rhetoric, suggesting a functional interdependence beneath the surface of official hostility.

Washington’s approach: Seeking economic stabilization

Behind the scenes, reports indicate that high-level U.S. officials, including Treasury Secretary Scott Bessent and White House economic advisor Kevin Hassett, have voiced optimism about reaching a breakthrough. The motivation appears driven by concerns over inflation, stagnating consumer sentiment, and broader geopolitical calculations as the 2026 U.S. elections loom. Opening a line of dialogue with China may be a strategic move aimed at economic stabilization and global investor confidence.

Whether this constitutes a fundamental policy shift or a tactical adjustment remains to be seen. The absence of concrete U.S. concessions thus far means the cause-effect relationship between U.S. outreach and potential policy changes from China is still speculative. Nonetheless, the pattern of engagement suggests that both sides are testing the waters for a possible soft reset.

A cautious opening in a long-term standoff

The latest developments point to a cautious yet noteworthy shift in U.S.-China trade relations. While no formal negotiations have begun, the fact that Washington is signaling willingness to talk—and that Beijing is openly responding—could mark the start of a recalibrated engagement phase. Still, progress will likely hinge on whether the U.S. is prepared to meet China’s demand for a rollback of unilateral tariffs.

In analytical terms, this dynamic exhibits a conditional correlation: dialogue may follow tariff relief, but it is not assured without demonstrable shifts in U.S. trade posture. For now, the bilateral standoff persists, though with signs of possible thawing—driven by both economic pragmatism and geopolitical recalculations.

Source: Reuters

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Economic

Stocks

Wall Street and European stocks surged and the dollar lost ground on Friday as investor risk appetite was strengthened by a strong U.S. employment report and signs China is open to tariff negotiations.

All three major U.S. stock indexes were sharply higher, with economically sensitive financials (.SPSY), transports (.DJT), and microchips (.SOX) outperforming the broader market.

All three indexes were headed for weekly gains.

The U.S. economy added more jobs than expected last month and wage inflation came in below consensus, according to the Labor Department, prompting a jump in benchmark U.S. Treasury yields.

"There was really not anything not to like about the jobs data; it indicates that the economy is doing just fine," said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois. "There are still discussions about the impacts of tariffs, but so far at least, that data has not shown up in a lot of the numbers."

Beijing is evaluating Washington's offer to hold talks over U.S. President Donald Trump's crushing tariffs, China's Commerce Ministry said, signaling a potential de-escalation of the market-rattling trade war.

"China and the U.S. are both taking slow but repeated steps toward negotiation and reconciliation," Jed Ellerbroek, portfolio manager at Argent Capital Management in St. Louis. "It seems the spiraling-out-of-control phase ended."

"The market does not believe that the current tariff rates are going to persist for very long," Ellerbroek added.

Lack of clarity regarding U.S.-China trade duties has contributed to a marked deterioration in U.S. businesses' long-term outlooks, the latest round of quarterly earnings results has shown.

Apple (AAPL.O) and Amazon.com (AMZN.O) reported quarterly earnings late on Thursday with disappointing forecasts, including Apple's estimated $900 million in tariff costs. The reports took some wind from the sails of the so-called Magnificent Seven group of artificial intelligence-related megacap stocks, which had enjoyed a rebound this week.

General Motors (GM.N) warned of a $4 billion-$5 billion hit to earnings and American Airlines (AAL.O) withdrew profit forecasts.

The Dow Jones Industrial Average (.DJI) rose 586.76 points, or 1.44%, to 41,339.67, the S&P 500 (.SPX) rose 93.31 points, or 1.67%, to 5,697.77 and the Nasdaq Composite (.IXIC) rose 322.93 points, or 1.83%, to 18,035.16.

European shares surged, closing the book on a busy earnings week as revived hopes of Sino-U.S. trade negotiations and solid employment data stoked investor optimism.

MSCI's gauge of stocks across the globe (.MIWD00000PUS) rose 14.11 points, or 1.69%, to 849.31.

The pan-European STOXX 600 (.STOXX) index rose 1.67%, while Europe's broad FTSEurofirst 300 index (.FTE:3) rose 36.55 points, or 1.75%.

Emerging market stocks (.MSCIEF) rose 23.31 points, or 2.10%, to 1,135.28. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed higher by 2.4%, to 594.90, while Japan's Nikkei (.N225) rose 378.39 points, or 1.04%, to 36,830.69.

Treasury yields rose as the strong employment data led investors to pare bets on a Federal Reserve rate cut in June.

Treasuries also came under pressure from fears of Japan leveraging its massive U.S. debt holdings as a negotiating tool in trade talks.

The yield on benchmark U.S. 10-year notes rose 9.7 basis points to 4.328%, from 4.231% late on Thursday.

The 30-year bond yield rose 6.5 basis points to 4.8021% from 4.737% late on Thursday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 14.1 basis points to 3.843%, from 3.701% late on Thursday.

The dollar dipped in the wake of the upbeat U.S. jobs report.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.08% to 100.06, with the euro up 0.04% at $1.1295.

Against the Japanese yen, the dollar weakened 0.25% to 145.06.

Crude extended its slide as investors positioned themselves ahead of an expected decision by OPEC+ to boost output.

U.S. crude fell 1.60% to settle at $58.29 per barrel, while Brent settled at $61.29 per barrel, down 1.35% on the day.

Gold prices reversed earlier gains and were headed for a weekly loss amid easing trade tensions.

Spot gold fell 0.49% to $3,224.39 an ounce. U.S. gold futures rose 0.47% to $3,225.00 an ounce.

Source: Reuters

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Commodity

Political

A renewed warning with global ramifications

On May 1, former U.S. President Donald Trump issued a forceful statement on his social media platform Truth Social, warning that any country or individual purchasing crude oil or petrochemical products from Iran would be subject to secondary sanctions and entirely barred from doing business with the United States. The wording left little room for interpretation—Trump emphasized that even minimal transactions would trigger punitive consequences. This announcement serves as a continuation of his "maximum pressure" strategy, originally launched during his presidency, aimed at cutting off Iran’s oil revenue stream to undermine what he claims is the country’s financial support for armed groups across the Middle East.

Although Trump is no longer in office, his influence over Republican foreign policy remains strong. The message resonates not only as a potential signal of policy direction should he return to power but also as a warning to allies and adversaries alike that the U.S. could take an even firmer line on Iran in the near future.

Immediate market reaction: Price volatility reflects geopolitical tension

Oil markets reacted swiftly to the statement. U.S. West Texas Intermediate (WTI) crude futures rose by $1.11, or 1.91%, closing at $59.32 per barrel. Meanwhile, Brent crude, the global benchmark, climbed $1.15, or 1.88%, to reach $62.21 per barrel. This surge in prices reflects the market’s sensitivity to geopolitical risks, especially those related to Middle Eastern supply chains. Although the statement itself did not entail immediate changes to supply or enforcement mechanisms, it created anticipation of potential disruptions.

This price movement illustrates a relationship of strong correlation rather than direct causation—Trump’s rhetoric alone does not physically reduce oil output or shipments, but it influences perceptions of future risk, which in turn affect pricing. Traders, aware of the historical impact of U.S. sanctions on oil flows, may adjust their expectations based on the likelihood of increased enforcement or diplomatic breakdowns.

China’s oil imports from Iran: At the center of U.S. attention

One of the key underlying messages of Trump’s warning appears to be directed at China. According to Scott Modell, CEO of Rapidan Energy and a former CIA officer, China remains the primary importer of Iranian oil, bringing in over 1 million barrels per day despite existing sanctions. Modell argues that unless Washington is willing to impose direct penalties on Chinese state-owned enterprises or intervene in China’s broader energy infrastructure, the current sanctions will likely have limited practical effect.

This raises an important analytical distinction: while Trump's warning escalates rhetorical pressure, it does not yet demonstrate a causal link to decreased Iranian exports. Instead, the situation highlights a scenario where trends in Chinese imports and American foreign policy evolve in parallel but are not strictly cause-and-effect. Beijing’s continued defiance suggests that economic incentives—such as access to discounted Iranian oil—outweigh the risk of potential penalties, especially if those penalties are not uniformly or aggressively enforced.

The nuclear dimension: Parallel diplomacy and coercion

Despite the aggressive tone of the oil sanctions warning, Trump also indicated that the U.S. remains open to renegotiating a nuclear deal with Iran. This echoes his stance during his presidency, when he withdrew from the 2015 Joint Comprehensive Plan of Action (JCPOA), claiming it was flawed and ineffective. Since then, efforts to create a new agreement have been sporadic and fraught with setbacks.

The duality in Trump’s strategy—issuing threats while proposing future talks—reinforces a negotiation approach that prioritizes leverage through strength. However, this posture carries risks. It can delay diplomatic engagement by alienating Tehran or by increasing domestic resistance within Iran to any perceived capitulation. While Trump may aim to compel Iran back to the negotiating table, the broader geopolitical landscape, including Tehran’s relationships with non-Western powers like China and Russia, complicates that objective.

This balance of pressure and diplomacy represents a complex interplay in which policy moves do not guarantee corresponding behavioral shifts from Iran. Rather, the two sides may become further entrenched in a strategic standoff.

Strategic messaging with uncertain outcomes

Trump’s recent declaration can be understood less as a tactical policy update and more as a strategic message—to allies, adversaries, and voters—that his foreign policy principles remain grounded in zero-tolerance approaches to perceived threats. The immediate consequence was a rise in oil prices, indicating the market’s concern that his rhetoric could eventually translate into real-world enforcement.

Yet, the structural dynamics of global energy trade and the geopolitical alignments of key players like China suggest that the outcomes Trump seeks may not materialize without broader international coordination or more forceful economic tools. The cause-and-effect relationship between Trump’s sanctions warnings and actual reductions in Iranian oil sales remains tenuous. Instead, the data suggest a recurring pattern: policy pronouncements produce price signals and political posturing, but without direct intervention in supply chains or trade enforcement, behavioral change is limited.

Trump’s message marks a continuation of a well-established strategy that blends economic threats with limited diplomatic overtures. While it serves to reassert his geopolitical philosophy and influence public discourse, the effectiveness of such declarations—especially in deterring China’s energy partnerships with Iran—remains questionable without a shift in enforcement. What emerges is a complex web of correlated developments rather than linear cause-and-effect reactions. As such, the warning reinforces strategic tensions but does not, by itself, constitute a decisive turning point in U.S.-Iran-China energy relations.

Source: CNBC

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Economic

Political

The plan came out on Friday. It is putting pressure on Republican lawmakers to cut more than 20% from government funds.

Congress isn’t used to making cuts anywhere near what Trump wants. This is making things more tense between the White House and congressional Republicans as GOP leaders try to fund the government before the Sept. 30 shutdown deadline.

The budget demands

For the fiscal year that starts in October, Trump’s budget calls for big cuts to important programs in foreign aid, energy, the environment, and education. It also calls for cutting hundreds of millions of dollars in funds and other projects that the White House calls “wasteful.” In some situations, the government wants to get rid of whole agencies.

At the same time, Trump is asking Congress for big increases in spending for things like defense and border security, as well as safety on the roads and in the air and law enforcement work.

The lower spending goal would have a big impact on both domestic programs and foreign aid. For example, the White House said that Environmental Protection Agency programs were not “environmental justice” and that millions of dollars in Department of Education grants for teacher support and preschool development were being cut.

The administration said these grants promoted “critical race theory” and diversity, equity, and inclusion initiatives.

The White House also wants to shut down USAID and the US Institute of Peace. They are two of the most well-known organizations that DOGE has been going after lately.

The administration would cut millions of dollars from public health agencies like the National Institutes of Health and the Centers for Disease Control and Prevention at the Department of Health and Human Services and merge several smaller health offices.

In addition, the plan would cut the Department of Housing and Urban Development’s extra money by more than 40%. The Department of the Interior and the Department of Labor would also see big cuts to their budgets—more than 30%.

The government also laid out deep cuts they wanted to make to dozens of programs in a wide range of offices and agencies. These included programs at the State Department that are meant to promote US “soft power” abroad, programs at NASA that support science and the International Space Station, and a number of conservation efforts.

“The administration wish list” could be rejected

Congress usually rejects the White House’s budget ideas in favor of its own spending plan. Also, the top appropriator for the House has not promised to use Trump’s overall totals as the cap for the dozen funding bills that Republicans want to get through committee by August.

“Look, we’re supportive of this administration what it’s trying to do,” House Appropriations Chair Tom Cole (R-Okla.) told reporters this week. “But with all due respect to anybody, I think the members have a better understanding of what can pass and what can’t than the Executive Branch does.”

The budget is still important because it shows Trump’s political and spending priorities. It’s become even more important as the president tries to take away the power of the purse from politicians on Capitol Hill.

“The president proposes, Congress disposes” used to be a saying on Capitol Hill, but this year it doesn’t seem to apply as much. Trump has been canceling and freezing hundreds of billions of dollars without Congress’ permission.

This has led to lawsuits nationwide and 39 investigations into whether the Trump administration is breaking the law by “impounding” funds that Congress already approved. In this situation, the White House’s budget proposal is their biggest shot yet.

Source: Cryptopolitan

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Commodity

Oil slumped as OPEC+ discussed making a second major production increase, inflaming concerns about swelling global supplies that have dragged down crude prices this year.

West Texas Intermediate futures fell almost 2% to trade around $58 a barrel, continuing a slide this week that has brought prices near the lowest since early 2021. Key OPEC+ nations are considering another production increase of about 400,000 barrels a day in June ahead of a meeting the group pushed forward two days to May 3.

Another aggressive supply boost from the cartel threatens to batter a market already pressured by soft Chinese demand and plentiful output from outside the group. The increase would be in line with figures previously telegraphed by the group and roughly matches last month’s shock hike, which was seen as a bid to discipline over-producing members.

“OPEC’s decision framework appears to be fueled by the persistent cheating, particularly from the likes of Iraq, Kazakhstan, Russia among others,” TD Cowen strategists including Dan Ghali and Bart Melek said in a note to clients. Inventories may increase by about 200 million barrels over the next three quarters, which could drop crude toward the low $50s, they wrote.

Crude has shed about 19% this year — and briefly touched a four-year low last month — as the Trump administration’s tariffs fan concerns that energy demand will fall.

The drop in prices is already showing signs of squeezing a key industry that US President Donald Trump pledged to help. Some of the biggest US shale-oil producers plan to slash about 4% of their drilling rigs by the end of the year. Chevron Corp. said on an earnings call on Friday that it would reduce share buybacks, citing a softening market.

The bearish OPEC+ development overshadowed earlier news that China is assessing the possibility of talks with the US that could ease the trade conflict between the two economic giants. The Wall Street Journal reported later that China had approached the Trump administration to ask what changes the US was seeking in relation to the production of precursor chemicals that are used to make fentanyl.

Limiting crude’s losses was Trump’s pledge to impose secondary sanctions on any nations or companies buying Iranian oil, ratcheting up pressure on Tehran as nuclear talks with Washington hit a snag. The vow follows a similar move in early March to place “secondary tariffs” on countries that obtain oil from Venezuela.

Top buyers of crude from the targeted nations, like China and India, are also the epicenters of the US-led trade war, meaning the indirect penalties may exacerbate economic strain from Beijing to New Delhi.