Trump has cut his original 50-day deadline for a Russia-Ukraine peace deal to just “10 or 12 days.” He showed his frustration during a press conference in Scotland with UK Prime Minister Keir Starmer. Trump warned that if Russia doesn’t comply, his administration will impose 100% secondary tariffs on countries still buying Russian exports. Right now, countries like India, China, and Turkey buy about 60% of Russia’s crude exports, helping Russia’s economy since its 2022 invasion of Ukraine. The EU plans to stop importing refined products made from Russian oil by 2026. Indian officials caution that U.S. secondary sanctions could cause major disruptions, forcing these countries to look for other suppliers.

Potential Market Volatility

We expect significant fluctuations in the market, especially in energy and currency, due to the new, tight deadline. The 10-to-12-day window set by Trump could lead to sharp, quick price changes depending on the outcome. Traders should be ready for increased risk, as large-scale diplomatic negotiations rarely conclude under such urgent timeframes. With the risk of sanctions threatening nearly 60% of Russia’s crude exports, oil prices may rise. Brent crude is already nearing $86 a barrel following this news, and we advise buying call options on WTI or Brent futures to capitalize on potential price increases from a supply shock. Watch the CBOE Crude Oil ETF Volatility Index (OVX) for signs of panic buying. On the stock market side, it could be smart to hedge against a possible downturn by purchasing put options on indices like the S&P 500 or emerging market ETFs. The CBOE Volatility Index (VIX) is currently around 14, which we believe doesn’t accurately reflect the geopolitical risks if these negotiations fail. A breakdown in talks might significantly impact global companies linked to supply chains in China and India.

Market Reactions and Currency Implications

In the past, during the U.S.-China trade war, markets reacted sharply to tariff announcements, often even before they took effect. We expect a similar reaction now, with algorithmic trading likely to aggressively sell assets at any hint of impending secondary sanctions. Therefore, it’s vital to have defensive positions ready before the deadline hits. If a deal doesn’t happen, we foresee a shift toward the U.S. dollar as a safe haven, putting pressure on the currencies of affected countries. This creates an opportunity to short the Russian ruble or Indian rupee against the dollar. The potential for 100% tariffs would be a significant economic shock that currency markets would adjust to quickly. Create your live VT Markets account and start trading now.

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