Peace or Real Sanctions Against Russia: Europe is Concerned
The fear the U.S. could cutoff Russian energy
The efforts to bring the Ukraine War to a close are a topic of heated debates that continue across the continent, North America, and even Riyadh, Saudi Arabia, which serves as a neutral location for the warring parties to meet with the U.S. to broker a peace deal. The idea of ending the war is concerning to many leaders in Europe, as an aggressive Russia would no longer be focused on Ukraine but could turn its attention to a West that has made itself hostile from the Russian perspective. This has sparked worries that an undefeated Russia might seek retribution against the West, as the consequences of European policies could finally be felt. This is at the same time as the U.S. is considered disengaging from Europe to pivot to Asia to counter China, and this leaves many in Europe feeling exposed to vengeful Russians. What is coming clear, though, is that despite the protests from European capitals, the role Western leaders played in supplying funds to the Russian war machine.
The initial Western reaction of the U.S. and Europe to the Russian invasion was to implement what was advertised as the harshest sanctions ever applied to a country. The actions included, most of all, the freezing of Russian financial assets, including privately owned ones, that were held in the West and the sanctioning of Russian fossil fuels, which is a primary industry that sustains the Russian economy. Despite the rhetoric, the sanctions did not completely isolate Russian energy from the global market, nor did they ever aim to do so. There were price caps placed on the prices the Russians could receive from their energy sales and insurance sanctions to limit the oil tankers that could be used to trade Russian fossil fuels.
Since the sanctions have been put in place, Russia has sold $922 billion (847 billion Euros), and in 2024 alone, Russia sold $263 billion (242 billion Euros). The Russian energy trade is only 8% lower than pre-invasion levels. This is hardly an effective sanction regime on the major Russian export. The cause of this meager change is that fossil fuels are fungible, so as European countries bought less Russian oil, China, India, and Turkey bought more of it, and Middle Eastern oil shipments, for example, were reduced to China and India but increased to Europe.
Despite the sanctions on the insurance of tankers carrying Russian oil, Russia currently has 558 “shadow” oil tankers that carry 61% of its oil exports. The number is so precise because the West knows about them, and despite them breaking sanctions, the West has largely allowed them to exist and operate without interference, further diluting the impact of the sanctions.
These two factors of the energy sanction regime are not a bug of the sanctions but a feature. The U.S., Canada, and Europe were, despite their rhetoric, more concerned about the impact of surging energy prices and supply shocks that would impact their economy and, with it, their electoral prospects than they were about punishing Russia to stop its war.
The energy shocks have been significant in Europe, especially in Germany, which prostrated itself prior to the war for cheap Russian gas, but the supply has continued to flow. The fact is that Europe has bought more Russian energy in 2024 than it has provided aid to Ukraine (21.9 billion euros spent on Russian energy versus 18.7 billion euros to Ukraine in non-military financial aid). While Europe did decrease its purchases from Russia by 1% compared to 2023, it's important to acknowledge that the overall volume of Russian energy fell by 3% during the same period. In commerce terms, Russia's energy sales declined year over year but gained market share in Europe due to Europe’s demand falling by less than the rest of the world market.
The concern about the price shock and supply disruptions was not the only concern for the prior U.S. administration (which sold off half the U.S. strategic petroleum reserve prior to and just after the 2022 midterms to reduce price shocks to the American electorate) and the Europeans. Another concern was the commitment to green energy initiatives and carbon emission reductions in their respective countries. These factors prevented the Western supporters of Ukraine from leveraging the energy reserves of the U.S. and Canada to eventually replace Russian energy production that could have been truly sanctioned and removed from the international market. Such a move would have taken time to ramp up, starved Russia of its primary revenue streams, and made it impossible to fund the war and shield its population from the economic pain of it.
The intentionally ineffective sanction regime is a flaw that the new U.S. Treasury Secretary Scott Bessent has identified, and unlike his predecessor, Secretary Janet Yellen, or the European allies, he is willing to seek more aggressive sanctions against Russia if they refuse to agree to a newly proposed ceasefire or to participate in serious negotiations to end the war. Secretary Bessent has this flexibility because U.S. President Trump has set a policy to leverage U.S. energy production to grow the economy and lower prices. This implies that U.S. energy supplies could counterbalance the losses of Russian energy supplies in the global market, posing a significant threat to the Russian economy, not just its war economy.
The election in the U.S. has made the Europeans look at the U.S. and its electorate as a mercurial ally that defies the predictive nature of European politics, but the change this time around has shaken the entrenched power centers of Europe to the core. This has resulted in European leaders going into wild mood swings of public displays of fear, depression, anxiety, and anger. It is unclear if the Europeans would be willing to cut off Russian energy from the world, even if it was a way to end the war, as they seem to be in a mode where it is better to accept the misery you know—Russian energy and aggression—than the misery you do not know—having to make difficult decisions over energy and defense policies. There are indications of both sentiments in Europe, and so Europe is still in disunity. The more things change, the more they stay the same.
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References:
https://energyandcleanair.org/publication/eu-imports-of-russian-fossil-fuels-in-third-year-of-invasion-surpass-financial-aid-sent-to-ukraine/
https://www.euronews.com/my-europe/2025/03/05/has-europe-spent-more-on-russian-oil-and-gas-than-aid-to-ukraine-as-trump-claims
https://www.nbcnews.com/politics/white-house/trump-threatens-impose-large-scale-sanctions-russia-peace-agreement-uk-rcna195333
EU is willing to fight to the last Ukrainian.