Russia in Trump’s crosshairs—oil markets on alert

President Trump has sharply shortened his own deadline for punishing buyers of Russian oil, catching markets off guard and forcing investors to price in a risk that had previously been dismissed.

On Monday, standing beside UK Prime Minister Keir Starmer in Scotland, Trump announced that Moscow now has only 10 to 12 days to secure a peace deal over Ukraine.

If it doesn’t, he says he will impose 100% tariffs on countries still buying Russian oil, which includes some of the biggest economies in the world, such as India and China.

This threat, if acted on, would mark the most aggressive move yet in Washington’s effort to tighten the screws on Russian energy exports.

It’s also a clear departure from Trump’s previous position. Just two weeks ago, he gave Russia 50 days. Now, that window has collapsed, and the consequences of action or inaction are closer than markets had anticipated.

The shift in tone and timing has already started to move prices. Brent crude climbed nearly 3% on Monday. Not because sanctions were in place, but because the market was no longer comfortable assuming they wouldn’t be.

When a major energy exporter faces a new access risk, and the message comes from the President of the United States, traders have no choice but to respond.

What happens next is unknowable. Trump has backed down from dramatic threats before, especially when markets push back. He’s also shown a willingness to act when it fits his strategy.

For instance, the airstrikes on Iran’s nuclear sites in June were not foreshadowed. They were carried out without warning, and they sent ripples through global markets. That’s part of what makes this current situation so tense. The unpredictability forces investors to prepare for both outcomes at once.

There’s little doubt about the impact if Trump does move forward. Russia continues to export close to 4.7 million barrels of crude per day, and more than 2.5 million barrels of refined products, which represents a significant share of global supply.

If secondary sanctions are imposed, the impact would be swift. Tanker routes would shift, buyers would scramble, and, clearly, pressure on pricing would intensify.

The inflation risk is real. Energy prices remain a critical input in the broader inflation picture. If crude climbs on sanctions, the next inflation print could surprise to the upside.

This would complicate domestic monetary policy just as Trump is publicly calling for interest rate cuts. He’s been consistent in arguing that borrowing costs are too high.

However, if inflation rises because of his own actions, the Fed would have no space to ease. This could become politically awkward, particularly in a climate where inflation expectations are stabilising.

Then there’s the geopolitical consequence. By threatening secondary sanctions, Trump is essentially asking India, China, and other Russian oil customers to pick sides.

It brings new friction into a set of already fragile global relationships. It could also accelerate the slow fragmentation we’ve seen in global trade and finance over the last several years.

For investors, this creates a multidimensional challenge. It’s not just about oil. It’s about policy, inflation, global alignment, and the credibility of US threats.

This is why I don’t believe this can be ignored. Even if Trump chooses not to follow through, the possibility has already changed behaviour.

This moment is now priced into the market. The only question is how far it moves from here.

The timeline is tight. The signals are mixed. But the risk is on the table.

Whatever Trump decides to do next, markets are no longer able to look past it.