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Petroleum industry

Sanctions on Russia Have Failed to Stop the War So Far – Will Trump's Latest Package Be Any Different?

Strategic Insights

— 1 min read

Russian President Vladimir Putin has continued his land grab in Ukraine with little success, despite three years of western sanctions that were intended to stop him. The US treasury secretary, Scott Bessent, has announced the latest round of sanctions, targeting Rosneft and Lukoil, Russia's two largest oil companies. However, these sanctions have failed to achieve their goals, with the Russian economy adapting to resist western sanctions.

Key Takeaways:

  • The sanctions imposed on Russia have failed to stop the war, despite three years of efforts by the US and EU.
  • Russia's economy has been set up to resist western sanctions, with the country managing to circumvent them and maintain its fighting force.
  • The US treasury secretary, Scott Bessent, has announced the latest round of sanctions, targeting Rosneft and Lukoil, Russia's two largest oil companies.
  • The sanctions have had little impact on the Russian economy, with the country's oil and gas exports continuing to flow despite EU port bans on 117 ships believed to be part of a "shadow fleet".
  • Sanctions are not effective against autocracies, where power is not in the hands of the people and can only be changed by the government.
  • The Trump administration has finally done something besides putting out the red carpet for Putin, with the latest round of sanctions showing hope.

Statistics:

  • The US sanctions have imposed on Russia have cost the country more than £28 billion since the start of the war.
  • The EU has imposed 19 rounds of sanctions against Russia since the full-scale invasion in 2022.
  • Russia's economy is now focused on waging war, with soldiers being paid up to 10 million rubles (£76,500) to join the military.
  • VAT is forecast to rise from 20% to 22% in 2026, which will lower investment into industries like barber shops.

Sources:

  • The Conversation -- UK -- By Sergey V. Popov, Senior Lecturer in Economics, Cardiff University
  • European Union sanctions against Russia
  • US Treasury Secretary Scott Bessent statement
  • BBC News: "Russia crisis: EU imposes new sanctions"
  • BBC News: "Ukraine crisis: Russia 'forgives' debts for soldiers"

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