Tightening the energy sanctions regime is the only way to force Russia to take peace negotiations seriously.

With Russian drones and missiles raining down on Ukrainian cities in record numbers, it is time for the Trump administration to act. The time to tempt Putin with concessions is over. Serious pressure is needed now to signal resolve in supporting Ukraine and impose tighter restrictions on Russia’s war-making capacity. Viable options are available for strengthening existing sanctions and imposing new measures that will curtail Russian energy earnings and limit its ability to finance the war. 

Instead of using and improving the existing sanctions, however, the White House has so far relied on tariffs, vowing to punish countries such as India and China that import Russian oil. Tariffs are blunt instruments that generate negative side effects. The recent 25 percent added tariff on India has prompted the Narendra Modi government to seek allies elsewhere, as symbolized by the recent Modi-Xi-Putin photo op. However, it has not reduced India’s purchases of Russian oil, which supply 40 percent of the country’s needs at a discounted rate. 

China is the largest purchaser of Russian oil, but its enormous economic and financial clout makes it relatively immune to US tariff threats. The Trump administration initially threatened China with triple-digit tariffs over trade issues, but China adopted strong countermeasures that persuaded US officials to back down. Tariff threats against China lack credibility. 

Sanctions offer a more targeted and effective strategy, imposing restrictions on specific entities and individuals rather than entire economies. The sanctions now in force against Russia are being imposed by approximately 40 countries, which collectively represent half of the world’s GDP. They target those in Russia and other countries who manage and benefit from the war or facilitate sanctions evasion. The sanctions have created significant economic and financial hardships for Russia and provide potential leverage for negotiating an end to the fighting.

Many steps can be taken to sharpen the bite of sanctions. The European Union has recently adopted a new round of measures aimed at reducing Russia’s earnings from energy exports and applying pressure on those evading sanctions. The new measures impose sanctions against banks in China and other countries that have financed Russian oil purchases. They include targeted sanctions on the Vadinar refinery in India, which sells products refined from Russian oil to European countries. 

One of the most important elements of the EU package is the lowering of the price cap on Russian oil. The current ceiling of $60 per barrel for Urals-grade crude is expected to decline to $47.60 per barrel. The plan includes a floating mechanism for adjusting the cap in response to global market price fluctuations. The price cap mechanism has the potential to reduce Russia’s oil export revenues, but enforcement of the system needs to be strengthened. Greater investments are needed for maritime surveillance, as well as the imposition of fines and trade restrictions on those who violate the price cap. The agencies responsible for this work will require additional staff and resources, as well as enhanced investigative powers, to effectively track and prosecute export control violations. 

The United States previously advocated lowering the price cap. Still, the White House has been reluctant to support the new European plan, in part because the administration has sought to use its stance on the price cap as leverage for diplomatic bargaining with Moscow. Given the failures of offering concessions to Russia, the United States should now give its full weight to enforcing the new price cap. Without US backing, the new system will be less effective. 

Other measures that could be taken to strengthen sanctions include the following:

1) Continuing to crack down on the “shadow fleet” of unregulated Russian tankers that are shipping oil without international insurance. The United States and the EU have imposed sanctions against hundreds of these vessels; however, more needs to be done to enforce these measures and impose stricter penalties. 

2) Accelerating the timeline for implementing the EU ban on imports of Russian liquefied natural gas (LNG). 

3) Engaging with Kazakhstan and other countries that are allowing shipments of prohibited technology to Russia, offering incentives for stricter border monitoring and customs control, and imposing penalties against specific companies and banks that facilitate this illicit trade. 

As sanctions pressures are strengthened, the offer of sanctions relief should remain on the table as a means of encouraging Russian concessions. Moscow clearly wishes to be free of the burden of sanctions and has made the removal of sanctions and economic normalization conditions for achieving peace. The United States and European countries have responded that sanctions relief will occur only if Moscow takes meaningful steps to end the fighting. Intensifying sanctions and increasing the pressure on Moscow will give added weight to that strategy.