Espreso. Global

Are sanctions on Russia for war against Ukraine working? Debate intensifies with Trump

3 January, 2025 Friday
13:53

The president-elect has pledged to limit the use of sanctions while committing to end the war in Ukraine, raising concerns about their effectiveness once again

client/title.list_title

The New York Times explains that since Russia's invasion of Ukraine in 2022, thousands of sanctions have been imposed on Russian banks, businesses, and individuals. With President-elect Donald Trump set to take office, the effectiveness and future of these sanctions are set to face renewed scrutiny.

Trump has expressed a desire to minimize the use of sanctions and promised a shift in U.S. policy toward Ukraine, vowing to end the war in one day. Experts believe sanctions and military aid will likely become key bargaining chips in any negotiations.

How significant will the sanctions be under Trump's control? The answer is hotly debated.

Early predictions that sanctions would collapse Putin's regime or devastate the ruble proved incorrect. Putin remains in power, and his forces continue to inflict heavy damage on Ukraine and make gains on the battlefield.

Sergei Guriev, a Russian economist and former resident, stated that the belief that sanctions could quickly end the war was more hopeful than realistic. He suggested a better measure of success is whether sanctions have hindered Moscow's ability to wage war effectively, and many analysts, including Guriev, argue that they have.

After the invasion of Ukraine, the U.S., Europe, and allies quickly restricted Russia’s access to global finance and the U.S. dollar, limiting its ability to sell oil. Western banks froze over $300 billion in Russian assets, and governments banned the trade of various goods, including advanced weaponry.

Europe, which had relied on Russia for 40% of its imported gas, began reducing its dependence. Russia could sell even less energy to Europe after Ukraine refused to renew an agreement for the transit of Russian gas through its pipeline.

“Imagine a world where sanctions were not introduced,” Mr. Guriev said. "A world where Russia’s foreign commerce was not severely limited and it had access to all of its frozen foreign reserves."

“It’s very clear that sanctions did cause problems for Putin, did reduce the amount of resources in his pocket and, therefore, saved lives in Ukraine,” he said. Without them, he added, Russia might have even won the war by now.

Russia's economy has been squeezed, with inflation driving interest rates to 21%. Despite heavy war spending, economic growth is slowing, and many products are either unavailable, overpriced, or replaced by inferior substitutes.

When Trump sits down to negotiate with Putin, sanctions will be “an extraordinarily valuable chip,” said Elina Ribakova, vice president for foreign policy at the Kyiv School of Economics and a nonresident scholar at the Peterson Institute for International Economics, a Washington think tank.

The most effective sanctions have targeted the global financial system, where the U.S. holds unique power. With the U.S. dollar as the universal currency, American banks control transactions, giving Washington significant leverage. By cutting off Russia’s access and threatening global banks, including in China, the U.S. has created a risk few institutions are willing to take.

Russia's removal from SWIFT, the international payment system, has significantly raised the cost, complexity, and time of global transactions, affecting everything from pharmaceuticals and machinery to oil and fertilizer sales.

“It really removes the capacity for any effective payment system,” said Andrew Shoyer, a partner at the law firm Sidley Austin who advises companies on compliance with sanctions.

While sanctions have had more impact than expected, they have fallen short of many hopes. Russia, with help from China, mitigated their effects by expanding trade, exploiting loopholes, and evading laws. China and India, for example, boosted Russia’s economy by purchasing oil, while China supplied essential materials for the war.

Western goods with both civilian and military uses have reached Russia through non-sanctioned countries like Turkey and the UAE. Critics argue that Western nations didn't act quickly or decisively enough to tighten sanctions on Russia. Concerns about energy supply shortages and rising oil prices led the U.S. and Europe to ease restrictions on Russian fuel exports.

The shift from broad European sanctions on Russian oil to a price cap allowed Russia to keep earning significant revenues, funding its war against Ukraine. Over time, Russia created a shadow fleet to bypass sanctions on oil transport. The EU also continues to buy nearly 50% of Russia’s liquefied natural gas exports.

Jeffrey Schott from the Peterson Institute stated that Moscow was able to sell too much gas and oil at high prices, making sanctions less effective. “Sanctions have been applied with one arm tied behind your back,” he said.

He and other critics argue that the piecemeal nature of the sanctions and weak enforcement have allowed Russia to avoid a tighter economic squeeze.

Even the most valuable sanctions may not be enough to convince Putin to agree to a settlement acceptable to Ukraine and its European allies. Some analysts suggest that the fall of Syria's President Bashar al-Assad could lead Putin to take a harder stance in Ukraine. Ultimately, the true value of sanctions as a bargaining chip depends on Putin's decision.

Tags:
Read also:
  • News
2025, Friday
17 January
21:20
Belarusian volunteer Maria Zaitseva killed near Bakhmut
20:55
Russian oil tankers under construction added to U.S. sanctions list
20:32
Exclusive
Ukraine Russia war live map, January 8-15
Russian forces resort to 'Zhiguli' cars for assaults on Ukrainian positions
20:10
Finnish party drops candidate over calling Ukraine war 'special military operation'
19:51
Ukrainian paratroopers capture 7 Russian soldiers in operation near Kurakhove
19:29
Zelenskyy awards Hero of Ukraine title to defender Dmytro Maslovskyi, who died in hand-to-hand combat
19:10
Exclusive
Military expert Zgurets addresses claims of 'manipulation' in WWII-era mine report
18:50
OPINION
Rubio understands Putin’s true goal
18:31
Russia’s Putin, Iran’s Pezeshkian sign strategic partnership agreement
18:10
Press release
Serhiy Zgurets' materials are reliable, free of manipulation: Espreso on controversy around publication on outdated mine procurement
17:54
In Kryvyi Rih, man lost his second wife in Russian attack, having buried his first during Kherson's occupation
17:35
97 clashes reported on Russian-Ukrainian front on Jan.17: tense situation in Pokrovsk sector
17:19
Updated
Russian ballistic missile strike on Ukraine’s Kryvyi Rih leaves four dead, several injured
17:14
OPINION
From powerhouse to prison: Russia’s descent under Putin
16:53
Ukrainian forces neutralize, capture Russian soldiers behind execution of two POWs
16:34
Exclusive
Trump's team knows losing Ukraine means China wins war – politician Rybachuk
16:15
How Russia’s ties with Iran shape war in Ukraine
16:00
Updated
Ukraine-Southeast Europe ministerial meeting in Kyiv issues joint communiqué
15:56
Review
Flying nonstop for over two days: inside Penguin drones supporting Ukrainian forces at front
15:35
Exclusive
Ukrainian general names three key strategic targets for Ukraine's long-range strikes on Russia
15:12
Russia's inflation surges as Central Bank faces political pressure
14:51
Russian drone attacks Ukrainian Witness filming crew in Zaporizhzhia sector
14:34
BTR-D
Russian forces use sunk BTR-Ds to create river crossings in Kursk
14:15
OPINION
Ukrainian refugees at risk: why is Slovakia threatening to halt aid?
13:33
Ukraine to introduce basic military training in universities
13:11
Exclusive
Russian forces try to surround Velyka Novosilka from almost all directions — military expert
12:54
OPINION
"Deal of the century": grandiose rhetoric, but still missing the mark
12:30
Ukrainian forces hit Russian radar equipment in Belgorod region
12:10
Exclusive
Europe either wakes up this year or becomes Russia’s next target — Ukrainian diplomat
11:50
Exclusive
Russian forces fail to cross Oskil River in Ukraine’s Kharkiv region — Ukrainian officer
11:33
Russia launches drone barrage on Ukraine, injures child in Kyiv
11:13
Russia's attacks cause nearly one-third increase in civilian casualties in Ukraine in 2024
10:55
Russian diplomats gain unauthorized access to restricted UK Parliament area
10:36
Review
New UK agreement: financial aid, deployment of peacekeepers to Ukraine. Serhiy Zgurets’ column
10:13
Ukraine reports 141 combat clashes, halts 53 Russian attacks in Pokrovsk direction
09:54
German FM criticizes Scholz government over €3 billion aid delay to Ukraine
09:32
Russia loses 1,670 soldiers, 13 armored vehicles, 12 tanks in one day of war in Ukraine
2025, Thursday
16 January
21:20
Updated
Zelenskyy responds to Polish presidential candidate opposing Ukraine’s EU, NATO membership
20:54
Exclusive
Moscow unlikely to agree to peacekeepers in Ukraine - Institute of World Policy
20:33
Exclusive
Trust in U.S., West declines among Ukrainians - survey
More news