Despite plenty of threats and ominous social media posts, the Trump administration has not taken an aggressive stance on sanctioning Russia yet. It has been more than three years into Russia’s war with Ukraine and more than three months since U.S. President Donald Trump first promised to end the war.
In contrast, Europe is stepping up, with its latest proposed sanctions targeting the financial sinews of Russia’s war machine, which complements its efforts to backstop Ukraine’s attempts to target the physical sinews.
On June 10, the European Union unveiled its 18th package of proposed sanctions that take aim at Moscow’s ability to fund the war through energy exports. There are plans to cut dozens of Russian banks completely out of the financial system; go after scores of tankers that ship illicit Russian crude; and to end, for good, Russia’s ability to hold Europe hostage through energy pipelines in Germany, as Trump seeks. There are also plans to limit the amount of money Russia can make by selling oil.
European Commission President Ursula von der Leyen said, the sanctions “robust” and “hard-biting,” while her vice president, Kaja Kallas, said, “Russia is cruel, aggressive, and a danger to us all.”
Not all of Europe’s action comes from Brussels. Baltic states such as Denmark and Sweden, which have been tormented for years by illicit Russian tanker flows through the narrows, are now doing what was unthinkable a year ago and are working to impound decrepit, undocumented ships that pose an immediate environmental threat, as well as the larger existential one. And last week, Germany Chancellor Friedrich Merz urged Trump to continue supporting Ukraine and NATO against Russia.
Merz left Washington triumphant in a way that many other world leaders who tangled with Trump in the Oval Office have not, but he failed to overcome the stasis that prevails in Washington on punishing Russia.
The U.S. Senate continues to deliberate over a “bone-crushing” sanctions bill sponsored by Republican Sen. Lindsey Graham and Democratic Sen. Richard Blumenthal that, among other provisions, would impose tariffs of at least 500 percent on any country that imports Russian oil, uranium, natural gas, petroleum products, or petrochemical products. As Stephen Sestanovich, a senior fellow for Russian and Eurasian studies at the Council on Foreign Relations noted, “Such duties would amount to a near-total embargo on U.S. trade with China and India, among many other countries.”
If the bill were to pass—it has a veto-proof majority in the Senate and a seemingly similar stampede in the House—it would take millions of Russian oil barrels off the market, which would lead to a global spike in oil prices and an even bigger recession than the one that’s inbound.
That might be why the White House has not only withheld support but quietly urged the kinds of changes that are typical in sanctions legislation, to give the executive more discretion. It is now likely pushed back to the end of the month, if then.
“Winning a Nobel Prize for peace in Ukraine is a prize worth pursuing, but losing domestic support because of higher gasoline prices hurts more,” said Kevin Book, the founder of ClearView Energy Partners.
The latest EU measures are not a done deal. As always in a bloc that relies on consensus, the lowest common denominator comes into play, and now there are two of them: Hungary and Slovakia. In the past, Europe has been able to pass its sanctions packages despite Hungary’s misgivings by massaging energy restrictions or pardoning particular oligarchs, but Europe’s rightward tilt makes walking a straight line an uphill task. Appeasing Hungary has been as easy as ensuring carve-outs for Russian gas or oil flows to Eastern Europe; but as the rope tightens, Europe’s wiggle room shrinks, as does its options to strong-arm recalcitrant EU members. There is chatter that this 18th package, unlike the one before it, might be met with serious resistance, but experts say odds are that part will go through.
The bigger push will come this weekend, at the G-7 meeting in Canada. The centerpiece of the latest EU package is an effort to hurt Russia’s bottom line by lowering the cap for legal Russian oil sales from $60 a barrel to $45 a barrel. The oil price cap was set in late 2022 at a high level because nobody wanted to really tank oil markets.
But since then, Trump’s trade wars have weakened the global economy and driven down benchmark prices for crude oil to nearly $60 a barrel. At a time when oil prices were in the mid-80s, the price cap was meant to be a cap, not a floor. And yet, today, Russian Urals crude oil—a lesser, sulfur-heavy grade of crude oil—can be sold on the global market with its habitual discount without falling afoul of Western sanctions. In order to put teeth back into the price cap, Europe and the West figure they need to tighten the zipper.
The question mark is the United States. There are plenty of experts who expect Washington to push back against the EU’s proposed package, and the EU cannot tighten the garrote without U.S. connivance, because the price cap is a G-7 construct outside the EU that relies on the United Kingdom’s dominance of the maritime oil insurance market and the United States’ ability to police sanctions transgressors. The really big question is whether the Trump administration wants to strangle Russian oil revenues and force an end to the war or court it as a postwar investment paradise.
The EU’s latest proposed measures have one big, positive step: further tightening restrictions on “shadow fleet tankers” that traffic Russian oil and products with no papers, rules, or insurance. The new measures would go after another 77 ships, out of the 350-odd shadow fleet tankers still afloat and flouting rules. The Biden administration hit this hard on its way out the door, and the bruises are only now showing.
When it comes to bringing down the shadow fleet, wrote Robin Brooks, Ben Harris, and Liam Marshall at the Brookings Institution, gang tackles are better. Only a handful of the illegal Russian ships are covered by U.S., EU, and U.K. sanctions. Quite a few are covered by two of the three. A bunch are unsanctioned altogether. The EU and the U.K. do a lot on sanctions enforcement, but there is no instrument like the U.S. Office of Foreign Assets Control (OFAC).
“In particular, when the EU and the U.K. sanction ships together, they shut down about 50 percent of sanctioned ships,” Brooks said. “That’s not as effective as OFAC, which is near 100 percent, but definitely nothing to sneeze at.”
More than three years into Europe’s bloodiest war since World War II, one that Russia continues to prosecute with a targeting as indiscriminate as it is deliberate, there are still ways to bring Moscow to heel beyond flashy drone strikes. The tools, whether in the EU’s 18 sanctions packages, the U.K.’s companion efforts, or a modified U.S. Senate sanctions bill, are out there.
The Trump administration’s handling of European allies and Ukraine is empowering Europe—not unlike the way its handling of Asian allies is empowering China, despite some regional blowback. But the response so far, resounding as it is, remains uneven.
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