Sanctions: A War of Attrition Between Russia and The West

Why It Matters

Sanctions influence both the duration of Russia’s conflict and the competitive dynamics for Western firms, making their design and enforcement critical to geopolitical stability and global business strategy.

Key Takeaways

• Sanctions strain Russian economy but not fully crippling war effort
• Oil shipments continue, financing Russia despite Western restrictions
• Cryptocurrency increasingly used to bypass sanctions for military components
• Western reluctance to enforce sanctions limits their long‑term effectiveness
• Future peace talks may force selective sanction relief favoring US firms

Summary

The video frames sanctions as a central pillar of the West’s response to Russia’s four‑year invasion of Ukraine, describing the policy tool as a "war of attrition" between Western policymakers and Russian actors seeking to evade restrictions. While sanctions have undeniably pressured the Russian economy, the discussion highlights that critical revenue streams—particularly oil exports through the Baltic Sea and the English Channel—remain active, sustaining Moscow’s war machine. Key data points include BBC correspondent Steve Rosenberg’s observations of daily newspaper reports on economic strain, the continued flow of oil shipments, and the growing reliance on cryptocurrency to purchase military‑grade components outside traditional financial channels. The analysis also stresses that Western governments have been hesitant to apply or maintain the toughest measures, diluting the overall impact of sanctions over time. Specific examples underscore the geopolitical stakes: potential U.S.–Russia deals that could grant American firms privileged market access, the prospect of Boeing securing Aeroflot contracts while Airbus is sidelined, and the looming question of whether European companies will obtain reconstruction contracts in post‑war Ukraine. These scenarios illustrate how sanctions could become bargaining chips in any future ceasefire negotiations. The implications are profound for policymakers and businesses alike. Sanctions will likely shape the contours of any peace settlement, forcing Europe to navigate pressure from the United States and consider selective relief for oligarchs or strategic industries. Companies must anticipate shifting regulatory landscapes and the possible re‑entry of Russian markets under conditional terms.

Original Description

For four years, sanctions have been a war of attrition between policy makers in the West and those in Russia trying to circumvent them.

In this video commentary, Tom Keatinge, Director of RUSI’s Centre for Finance and Security, explains the ways in which Western-imposed sanctions are working, and ways in which they’re not having the effect they should have done over the four years since the full-scale invasion of Ukraine by Russia.

What might happen as part of any peace deal or ceasefire? What are the concerns in Europe, and how will the reconstruction of Ukraine be considered in any agreement?