Sanctions are hitting Russia hard and the EU is ready to keep pressure on Russia.
By David O’Sullivan
March 24, 2025
CEPA
From the beginning of Russia’s invasion, the European Union has stood together with our American allies, providing military and humanitarian aid to Ukraine and imposing tough sanctions. Whatever the US now does, no reason exists to change course.
The facts speak for themselves: sanctions are working. Russia faces increasing economic difficulties. We must maintain the pressure.
Our sanctions pack more punch than their US equivalent, not because of transatlantic disagreement but because we traditionally trade more with Russia than the US. The EU has sanctioned more than 2,400 individuals who support Russian war efforts. We have prohibited the exports of dual-use goods and advanced technologies. We have limited Russia’s ability to finance the war, freezing €200 billion of the Russian Central Bank’s assets and “de-swifted” Russian banks from the global SWIFT bank transfer system. We have banned the imports of coal and oil while hampering Russia’s exports of gas.
To say these measures are unprecedented represents an understatement. It’s a long game. We are degrading Russian industrial capacity through the restriction of technology transfers crucial to the Russian military industry. Yet this achievement is too often lost in the background noise of damaging nitpicking. At a time when spurious claims and maverick attitudes proliferate, several fundamental truths must be recognized.
EU Sanctions Pack a Punch
From the onset of the war, we sought to hit Russia hard and strong. While Russia was the EU’s fifth largest trade partner in 2021 (representing 5.8% of the EU’s global trade in goods, or around €253 billion), by 2024, our trade has fallen to only €68 billion. Russia has failed to replace or redirect this 74% decrease in our bilateral trade.
In comparison, US trade with Russia has long been minuscule. In 2021, US exports to Russia accounted for 0.4% of total U.S. exports — roughly the same amount as Honduras. They dropped to an estimated $3.5 billion in 2024, a rounding error in a world where trillions are traded.
The EU’s energy mix has been transformed as it decoupled from Russia. Oil imports decreased by 90%, and Russian gas supply accounts for only 15% of EU imports (compared to 45% pre-war). These changes represent a massive shift in European energy policy — one that, while challenging in the short term, has reduced our vulnerability.
The Russian Economy is Suffering
All signs point to increasing economic difficulties for Russia as a result of sanctions, which explains why the Kremlin wants them lifted.
Key economic indicators are flashing red. The Russian Central Bank has been forced to keep interest rates to 21% and the official inflation rate is 10 % – although prices are likely to be rising much faster. Russian President Vladimir Putin has raided the National Wealth Fund to finance a war economy, cannibalizing productive sectors and Russia’s welfare system.
This strategy offers no productive return on investment. Although Putin has shown a willingness to sacrifice the well-being of his people to an extent that most thought he would not do, he cannot defy the laws of economics forever.
Sanctions are Working
By our estimation, sanctions have deprived Russia of more than $450 billion in revenue since February 2022, equivalent to nearly three years of military expenditures. They have obliged Russia to invest $10 billion to constitute a parallel fleet of ships to transport its oil in circumvention of the G7-agreed oil price cap. The EU has sanctioned 153 ships, including 131 shadow fleet tankers. Most of these ships are now unable to transport cargo, despite their efforts to obfuscate their identities.
Sanctions are increasing costs and delays and reducing equipment quality. The price of components has risen by 30% for the Russian war machine. Sanctions have prevented Russia from expanding military supplies to the battlefield despite extra investment and enormous military losses.
Where there are sanctions, there is circumvention. While sanctions are not foolproof, they act as vital grit in the system, making it harder, slower, and more expensive for Russia to wage its war.
We must stick to the course. In the words of European Commission President Ursula von der Leyen: we stand ready “to increase punitive sanctions against Russia, unless they (Russia) demonstrate true willingness to achieve a lasting peace agreement.”
David O’Sullivan is the European Union’s Sanctions Envoy. He previously served as the EU’s Ambassador to the US from 2014 to 2019. He has held a series of high-level positions in the EU, including as Secretary General of the European Commission and Chief Operating Officer of the EU’s new diplomatic service, the European External Action Service.