The squeeze in Russia's economy is tightening with sanctions from Europe and America.
It's World Business Express from the BBC World Service.
I'm Leanna Byrne.
We'll hear from India, caught between cheap Russian oil and US pressure to cut back.
And we ask, could these new sanctions push up fuel prices for the rest of us?
Yes, fresh sanctions are hitting Russia's energy sector from both the European Union and the United States.
Now, if that all sounds familiar, it's because we've been here before and sanctions are basically financial penalties.
The goal is to squeeze the money Russia earns from energy imports.
There have already been more than a dozen rounds of sanctions since the war in Ukraine began.
But these ones are different.
Washington has for the first time blacklisted Rosneft and Lukoil.
Russia's two largest oil producers.
Brussels is banning imports of Russian liquefied natural gas.
But will it work?
Here's former Russian Deputy Foreign Minister Andrei Felov.
Lukoil and Rosneft.
It's about 80% of Russian oil export.
And these two companies are the main suppliers for India and China.
It could seriously damage Russian income.
And this year, budget deficit is three times more than it was expected.
Now Moscow says these sanctions are entirely counterproductive, but Ukraine's President, Vladimir Zelensky, says they'll turn up the pressure on Vladimir Putin to end the war.
This is a good signal to other countries in the world to join the sanctions.
You know that not only energy, we need shadow fleet, etc.
And continue and continue until Putin will stop this war.
That was President Zelensky in Brussels earlier.
That's where the European Union announced more sanctions.
European Council President Antonio Costa said Europe was united.
Today in the morning we approved already the 19th package of sanctions targeting shadow fleet, banking and energy sector of Russia.
Many EU countries back the idea, but Belgium, which actually holds most of Russia's frozen assets, has questioned the legal basis for the move.
So to find out the details of these sanctions, I spoke to Alexei Kalmykov, a reporter at BBC News Russian.
Two Russian major oil companies were targeted, one state, one private.
But that will only take place in a month's time.
So Trump basically gave Putin four weeks to think carefully about his demands.
It's rather a signal, a warning shot.
The four-week transition allows both Rosneft and Lukoil to unwind their operation, to recalibrate their business, to minimize the consequences of these sanctions.
But the main issue here is Trump sending a signal to Putin and telling him that finally, after nine months, he's ready to go after the main vehicle for Russian war machine.
Its main expertise is oil and oil products.
And has Moscow responded?
Moscow always says that they don't care about sanctions, that they don't in any way handicap their economy.
We've seen that Russia has been adapting to the Western sanctions forever.
And that particular fact that Trump never exposed any new sanctions for nine months basically allowed Russia some breathing time and allow it to adopt to this new reality.
We know about the shadow fleet of tankers that move Russian oil and all the different schemes that allow Russia to still sell its oil at the market price to different buyers probably.
The biggest one being China and the second biggest one is India.
And what Trump didn't do rather than what he did, he didn't go after the buyers of Russian oil.
He threatened them with secondary sanctions in four weeks time, but he hasn't joined the European effort against the Shadow Fleet.
For example, he hasn't sanctioned any Chinese buyers.
No ports, no shipping companies, no tankers, nothing like that.
Alexei Kalmykov there.
Let's talk about India now, because it's been one of the biggest buyers of Russian oil since the war began.
But now its top refiner, Reliance Industries, says it's recalibrating those purchases as pressure from Washington grows.
But Narendra Taneja, chairman of the Independent Energy Policy Institute in New Delhi, thinks trade between Russia and India will continue, as is this talk of recalibration or India distancing away from Russia.
That's not how we look at it.
Let's not forget one thing.
Since the Ukraine war...
The oil world in particular has changed dramatically.
Now, if a country like India, I mean, we import roughly 89% of our total requirement of oil.
So for us it's important to see you know which are the main sources of supply as far as oil is concerned.
And at the same time, we go strictly by economics.
And look at the cost of production of oil in various countries.
For instance, the US is the biggest producer of oil in the world.
But the cost of production in the US is much higher than Russia.
Russia's cost of production of oil is actually very, very cheap.
Like, Saudi Arabia is very, very cheap.
Venezuela is a little bit higher.
So therefore, we look at all those aspects, while India is very keen to cut a trade deal with the United States, which President Trump wants.
And that's why the pressure on India in terms of Russian oil.
But it appears probably there will be some kind of breakthrough in the trade deal between India and the US, So that's a good sign.
But as far as Russian oil is concerned, we are unsentimental about these things, unlike people in Europe or in America.
But when you look at these US sanctions, you've got Europe's new LNG ban as well.
Does that mean anything for global energy stability?
Will it shift things?
To be honest, not.
If you look at the European Union, new sanctions against Russian LNG.
Effectively, these sanctions are not going to play a very significant role before 2027.
And at the same time, we know that LNG you can always buy in an open market.
So if I'm a consumer going to the petrol pump or the gas pump.
Does what's happening today, is this going to affect me in any way?
Not at all.
And India wants to make sure gas and oil is available to every Indian consumer across the country without any weight and at the affordable price.
India is still an oil economy and to sustain economic growth, it's important that the supply of oil is maintained.
That was Narendra Tanija from the Independent Energy Policy Institute in New Delhi.
With us now, Emma Wall, Chief Investment Strategist for Hargreaves Lansdown.
Emma, we've been talking a lot about oil, but has it affected the price of oil on the financial markets?
It has indeed.
It's interesting because your previous guests think it won't affect actually the supply-demand balance with India and China.
But the market doesn't quite agree.
The market thinks that India and China will go out into the market to find other supply and off the back of that Brent has jumped more than 5 to 66 a barrel.
Well, it's good to get your perspective on that, Emma.
Volvo, the Swedish space carmaker, this is another story that caught my eye.
Its shares have gone sky high, up 40%.
What's going on there?
Yeah, this is the best ever day for Volvo shares since it started trading four years ago.
So it was up 41% in intraday trading, now down to just 35%.
But that's still adding nearly US$3 billion to the value of the company in a day.
Ultimately, they've got a new CEO who returned to the business in April, Hacken Samuelson, who's implemented this big cost-cutting measure, cutting thousands of jobs.
And the latest quarterly results are showing that actually it's been a success and the market has reacted well.
All right, Emma Wall, thank you very much.
Let's talk about China.
It's the world's second biggest economy, but it's struggling.
And Beijing has engaged in a trade war with the US.
Its commerce ministry says more talks will take place in Malaysia this week.
Meanwhile, after four days of discussions at home, what priorities have China's leadership set for the rest of the decade?
Stephen McDonald is in Beijing.
Central to this is this emphasis on scientific and technological self-reliance, because the Trump administration continues to restrict and threaten more restrictions on access to computer chips, advanced software and the like.
And so this is the Communist Party's way of saying look, we need to up our game in terms of being able to produce all this stuff ourselves.
I mean, it also speaks about making up for lost export revenue by boosting domestic consumption.
The broad shift in China has been turning this country from a place that produces cheap sneakers and what have you to a high-tech powerhouse.
But the priority is going to be even more of this, according to this five-year plan that's been approved by the party.
Stephen MacDonald there, and I'm Leanna Byrne.
Thanks very much for listening.
