What Ends the War in Ukraine? More Oil

What does the war in Ukraine have to do with the price of groceries in your local supermarket and gas at the pump? A lot more than you may realize.

Let’s look at the situation on the ground in Ukraine and then widen the aperture to show how it affects the Middle East, trade with China and India, and ultimately the price of oil and the innumerable goods that arrive in your town by diesel trucks.

The narrative the western media puts out is that the war is a stalemate, Russian casualties are enormous, the Russian economy cannot sustain the pace of the war, and that with more weapons and money sent to Ukraine the tide can be turned, and Russia can be stopped in its efforts. Every facet of that narrative is false.

No Ceasefire for Russia

Russian troops are making advances along a 500-mile front from the southern Donbass to Kursk. It only seems slow because the Russia way of war is slow, methodical and lethal. Russian troops do not quickly assault a target city. They spend up to a year taking every village and town adjacent to the target until it is completely surrounded. Only then – when the defenders are isolated and cut off from resupply or rescue – do the Russian go in for the kill. Defenders are given a chance to surrender but are annihilated if they don’t.

This methodical pattern has played out in battles for Mariupol (2022), Bakhmut (2023), Avdiivka (2024) and Chasiv Yar (2025). The next major target is Pokrovsk, a medium-sized city in southern Donbas but a critical logistics hub. Once the Russians take it, the Ukrainian Armed Forces (UAF) will lose the ability to supply other positions along the entire front. At that point, there will be little to prevent Russian victories in Kramatorsk, Slovyansk and Lyman. From there, the Russian army will advance to the Dnieper River and gain effective control of all of eastern Ukraine. That’s not a stalemate; it’s a prelude to total victory.

The UAF have also suffered a total breakdown in the north as a result of their reckless invasion of Kursk (part of the Russian Federation) from the Ukrainian province of Sumy. The Russians repelled the invaders, wiped them out, and advanced in Sumy to create a security perimeter. This can also serve as a jumping off point for an assault on Kiev if the war goes that far.

This is why Putin has rejected Trump’s call for an unconditional ceasefire. The UAF and Zelensky naturally want a ceasefire to rearm, rest and reposition for a continuation of the war. Russia will never agree because they are winning decisively and have the UAF in full retreat or else surrounded. This is where Trump’s failure to understand Russia and the Russian way of war begins to echo in the global economy.

Sanctions and Assistance Won’t Work

Putin will enter negotiations and end the war at any time but only on his terms. Trump believes he has leverage over Putin through economic sanctions and new deliveries of weapons and money to Ukraine. Trump is wrong on both counts. Here’s why:

Every U.S. weapons system supplied to Ukraine since 2022 has failed. The Russians can jam the GPS guidance systems in the HIMARS artillery. Patriot anti-missile systems (that cost a billion dollars each) can’t stop Russian hypersonic missiles and have been blown up one at a time. Abrams, Challenger and Leopard tanks supplied by NATO have been left burning on the battlefield. The F-16 fighter jets supplied by Biden are being shot down by advanced Russian anti-aircraft systems.

Supplying more failed weapons systems won’t change the tide of war. Money won’t help either because it’s simply stolen by the Ukrainian neo-Nazi oligarchs.

Trump gave Putin an ultimatum, which expired on August 8. Putin did not comply (and no serious analyst expected he would). Trump will now lose face and lose credibility if he does not punish Russia. Hundreds of economic sanctions on Russia have failed since 2023. The Russian economy is outperforming the U.S. economy, and the ruble is at the same level against the dollar as before the war. New sanctions will also fail. Weapons and money will fail for the reasons described above.

What’s Left for Trump?

Trump’s next move involves secondary sanctions. These are economic sanctions imposed on third parties that do business with Russia instead of being imposed on Russia itself. The main targets for secondary sanctions are China and India.

Both China and India purchase large amounts of Russian oil. They pay mainly in U.S. dollars. Those dollars fuel the Russian war machine. Trump threatens to impose huge tariffs on Chinese and Indian exports to the United States if those countries don’t stop buying Russian oil. This is the set-up for another Trump failure.

India and China need the Russian oil to fuel their growing economies. They will continue to buy it. At that point, Trump may impose the tariffs. But at the same time, India and China are both engaged in regular trade negotiations with the White House as the U.S. has been doing with countries around the world. It should come as no surprise that the India and China tariff negotiations have not been going well. Why should they agree to regular tariffs without knowing whether punitive tariffs are right around the corner? They won’t.

China and India have various ways to respond. They could redirect their exports to friendly countries in Europe or Brazil and Australia. They could impose countervailing tariffs on U.S. exports to them, including soybeans and high-tech. They could restrict U.S. investment in their growing economies. The list goes on. What is certain is that the Trump tactic of secondary sanctions will hurt world trade and increase costs on many traded goods.

The biggest single cost will be a higher price for oil. That’s because Russia, India and China will all incur costs in insurance markets and ghost tanker fleets needed to evade the sanctions in the first place. Who wins from higher oil prices? Russia. Who loses? U.S. consumers who pay higher prices for gas at the pump compared to a world without sanctions.

The Solution? Flood The Oil Market

The best course for Trump to end the war and help Americans is to end the sanctions on Russia and refrain from any secondary sanctions. The next step is to flood the market with oil whether it comes from Russia, Saudi Arabia or the U.S. itself. That would drive the price of oil from $65.00 per barrel to $40.00 per barrel or even lower.

Who loses from low oil prices? Russia. Oil prices of $40.00 or less will bring Putin to the bargaining table and help end the war in Ukraine. Trump doesn’t understand how markets work and where the real leverage is against Russia. He’s under the sway of the neocons and warmongers like Lindsey Graham, Keith Kellog and Marco Rubio. Based on their advice, Trump will continue to fail in Ukraine and with Russia.

The economic impact of Trump’s misguided approach to Ukraine will not be highly inflationary but it will stand in the way of any disinflationary trend. Oil prices will move higher as Trump gets more desperate to put pressure on Putin. Let’s hope that the more reasonable voices like JD Vance and Pete Hegseth can persuade Trump to avoid the secondary sanctions on China and India. That could moderate oil prices. But I wouldn’t count on it. For now, the warmongers seem to be in charge.

We will keep a close eye on the Trump-Putin meeting this Friday for any breakthroughs in negotiations. Right now, Russia is holding all the cards.