When European Commission President Ursula von der Leyen announced plans for the EU’s 19th sanctions package in September 2025, she framed it as intensifying pressure on Russia. Yet comprehensive analysis of the impact of sanctions on Russia reveals a paradox: whilst Western economies suffer tangible harm, Moscow has successfully adapted through strategic partnerships with China and other non-Western nations, calling into question whether international sanctions achieve their intended foreign policy objectives or merely accelerate global economic fragmentation.
The economic data presents an uncomfortable reality. Russia’s energy revenues declined 19% year-on-year, yet the country’s economy grew 3.6% in 2023 with projections of 2.6% growth in 2024. This resilience stems from Russia’s long-term strategic planning that predates the invasion. As trade economist Rebecca Harding noted, Russia began focusing on grain production in 2000, diversified away from oil and gas, and switched export support measures to grain in 2017 after Western sanctions were first imposed. Russia now controls nearly 25% of world wheat exports, with African and European markets highly dependent on Russian supplies.
Europe’s Self-Inflicted Economic Wounds
The most striking aspect of Western sanctions policy is how EU sanctions have damaged the sanctioning nations more severely than their target. Before Russia’s 2022 invasion, Russia supplied 29% of EU oil imports and 48% of gas. Today those figures stand at 2% and 12% respectively. Yet imports haven’t ceased entirely – they’ve simply become more expensive and strategically problematic.
According to reporting by The Brussels Times, the EU imported €4.4 billion worth of Russian LNG in the first half of 2025, with France, Spain, Netherlands, Belgium and Italy as primary buyers. This represents not principled opposition but economic necessity: Russian LNG remains significantly cheaper than American alternatives. Existing agreements bind European buyers to Russian supplies despite political rhetoric about energy independence.
The absurdity deepens when examining indirect imports. Europe now purchases refined petroleum products from India and Turkey, which import Russian crude, refine it, and sell it back to Europe at substantial markup. In the first six months of 2025, the EU and Turkey imported 2.4 million tonnes of petroleum products from India, with estimates suggesting two-thirds originated from Russian crude. European buyers thus paid India approximately €1.5 billion for oil that was Russian in origin but sanitised through third-party processing.
This arrangement ensures Europe pays premium prices for the same Russian energy whilst simultaneously funding Indian refineries. Meanwhile, Germany – once Europe’s industrial engine – has lost 125,000 industrial jobs in recent weeks as energy-intensive manufacturing becomes economically unviable. The human cost of this policy appears in shuttered factories across the continent, yet sanctions are not working to achieve their stated purpose of forcing Russian withdrawal from Ukraine.
Russia’s Strategic Reorientation
Whilst Europe struggles, Russia has executed a strategic pivot that positions it for long-term economic partnership with Asia. The Power of Siberia 2 pipeline agreement with China represents a $13.6 billion investment delivering 50 billion cubic metres of gas annually through Mongolia. This infrastructure locks in Russia’s energy future whilst reducing Chinese reliance on seaborne LNG – potentially undermining American export ambitions that Europe’s energy crisis has bolstered.
The geopolitical implications extend beyond energy. Russia and China have strengthened economic ties across multiple sectors, with trade increasingly conducted in renminbi rather than dollars. Exclusion from SWIFT accelerated Russian adoption of China’s Cross-Border Interbank Payment System, whilst sanctions pressure drove increased use of Bitcoin and digital assets for international transactions. Rather than isolating Russia, Western policy has accelerated the creation of alternative financial architecture outside Western control.
The shadow fleet exemplifies Russian adaptability. The Kyiv School of Economics estimates approximately 70% of Russia’s seaborne oil exports now travel on vessels specifically assembled to evade sanctions. These tankers operate through complex ownership structures, often registered in jurisdictions with limited oversight. Whilst the UK sanctioned British ship finance veteran John Ormerod for allegedly facilitating shadow fleet purchases totalling over $700 million, enforcement remains sporadic and ineffective against the scale of evasion.
The Future-Proofing Fallacy
Perhaps the most counterproductive element of current policy is the EU’s “future-proofing” approach. The 18th sanctions package includes measures blocking any future business with Nord Stream pipelines despite them being non-operational. Paula Pinho, chief spokesperson for the European Commission, explained the goal is to “dissuade any interest, and notably interest from investors” in Russian energy infrastructure.
This eliminates the primary incentive Russia might have for negotiating sanctions removal. If European energy markets remain permanently closed regardless of Russian behaviour, why would Moscow care about lifting measures that offer no pathway to restored economic relationships? Former US sanctions architect Daleep Singh identified clear “off-ramps” as the most crucial element of effective sanctions design. By removing off-ramps entirely, Europe has transformed sanctions from pressure tools into permanent punishment that cannot influence Russian decision-making.
Strategic Reassessment Required
Three years into unprecedented Western sanctions, the question of whether are Russian sanctions working demands honest assessment. Russia continues its invasion. Putin’s domestic position remains secure. European economies face deindustrialisation whilst Russia builds alternative trade relationships that may prove more durable than previous Western partnerships.
The evidence suggests that Russian sanctions have succeeded primarily in accelerating trends that undermine Western economic dominance: dedollarisation, creation of alternative payment systems, and strengthening of the Russia-China axis. Meanwhile, innocent individuals caught in blanket designations suffer indefinitely whilst professional sanctions evaders operate with relative impunity. Until policymakers acknowledge these realities and develop strategies based on evidence rather than political theatre, sanctions will continue generating costs without achieving meaningful foreign policy objectives.
