Growing the Arsenal: Leveraging Fossil Fuels for Peace in Ukraine

The administration of US President Donald Trump is exploring new strategies to pressure Russian President Vladimir Putin to end Russia’s all-out invasion of Ukraine and make US support for Ukraine more sustainable. One idea has been to reduce Russia’s global oil footprint by flooding markets with cheap crude oil from Saudi Arabia and the Gulf. Doing so will be vital to guaranteeing the sustainability of the new sanctions regime, which will starve Russia’s war machine of vital revenues. 

Russia has been able to circumvent existing sanctions on its fossil fuels by exploiting loopholes and creating alternative supply chains, notably mobilizing a “shadow fleet” of oil tankers that have operated outside the jurisdiction of the G7’s Russian oil price cap. Moscow has benefited from favorable oil price differentials relative to global market prices, such that importers have been willing to risk secondary sanctions.  

The Kremlin’s war efforts continue to be aided by significant energy export revenues, amounting to more than €800 billion since February 2022—€200 billion of which has come from the EU. In fact, European imports of Russian liquefied natural gas (LNG)—which the EU has yet to ban and remains significantly cheaper than US super-chilled LNG—have reached record highs in the first weeks of 2025. Russian crude also continues to gush into the EU through Hungary, Slovakia, and Czechia  due to “temporary pipeline exceptions” for imports of Russian crude oil, and products refined from Russian crude have continued to enter through third countries.  

Nevertheless, Russia’s ability to finance its war efforts is coming to a crossroads, with severe state budget issues expected by the end of 2025 amid assessments that its National Wealth Fund, which houses national oil and gas revenues, could run dry of liquid reserves. Further, the sustainability of Russia’s war economy is being threatened by the compounding issues of a weakening currency, surging corporate debt, high interest rates, elevated inflation, and heightened risk of financial crisis.

By combining the United States’ new tighter sanctions on Russian oil with lower oil and gas prices, the threat of additional tariffs, and a reinforced commitment to supplying Ukraine with necessary weaponry, Washington may force Putin to take major concessions in potential upcoming negotiations—particularly if financial pressure is joined by weapons and security guarantees for Ukraine that limit his options on the battlefield.  

This is the only way to make Putin give up his imperial ambitions: by showing him that continuing down his long road of attempting to colonize Ukraine will only bring the demise of his forces.