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According to EU envoy David O'Sullivan, four years of Western measures have distorted the Russian economic system to the point that they may have plunged it into crisis...
For years, sanctions against Russia have been portrayed as a blunt weapon: too slow, too easy to circumvent, unable to stop Vladimir Putin’s war machine. Yet four years after the full-scale invasion of Ukraine, the picture emerging from European data and assessments is different. According to David O’Sullivan, the European Union’s special envoy for sanctions, the impact on the Russian economy is now “significant” and may be approaching the point of no return.
" Sanctions are not a magic wand and never have been. But I am quite convinced: they have really affected the Russian economy ," O'Sullivan explains in an interview with the Guardian. The heart of the problem, according to the Irish diplomat, is the deep distortion produced by the transformation of the civilian economy into a war economy. This constraint may work in the short term, but it cannot continue to defy the laws of economic gravity indefinitely. By 2026, he warns, the system could become "unsustainable."
The numbers are starting to bear this out. Revenue from oil and gas, the backbone of the Russian federal budget, halved in January, hitting its lowest level since 2020. Inflation is hovering around six percent, while interest rates have reached sixteen percent. This signals growing pressure on an economy that is sacrificing investment, consumption, and welfare to support the military effort.
The European Union has so far adopted nineteen sanctions packages, targeting over 2,700 individuals and political figures and blocking entire sectors: energy, aviation, technology, luxury goods, diamonds and gold. However, this unprecedented architecture has faced loopholes. O'Sullivan openly acknowledges that there will always be those who try to circumvent the rules. But he praises the results achieved in restricting the re-export of critical components through Central Asia, the Caucasus, Turkey, the United Arab Emirates and the Balkans.
A key issue is the so-called shadow fleet, which Linkiesta had already reported in October 2024, hundreds of old tankers, often with dubious ownership, used to transport Russian crude oil to China and India. Brussels has tightened its grip on this issue, sanctioning nearly six hundred ships.
"We have been successful in convincing flag states to withdraw their registrations. The Russians are finding it increasingly difficult to keep the oil flowing ," explains O'Sullivan.
However, the real stone guest remains China. Beijing, the European envoy notes, is filling the gaps left by the West, even without directly supplying weapons. European protests are met with the usual response: " We don't see any problem ". The position of India, a major buyer of Russian oil at discounted prices, but also a strategic trading partner for Europe, is more ambiguous.
This economic scenario forms the backdrop to the new diplomatic effort underway in Abu Dhabi. Talks between Ukraine, Russia and the United States, brokered by Washington, were described by Kiev as “substantial and productive,” even if they did not yield immediate progress. The most sensitive issues remain on the table: the occupied territories, the security guarantees, the risk that an agreement would freeze the conflict without resolving it. The same issues, the ones on which Russia is not willing to back down, the ones on which Ukraine cannot waver if it wants to secure its independent and sovereign future.
Here again comes the issue of sanctions. If they are truly eroding Russia’s economic foundations, as Brussels claims, time could become a decisive factor. But if the pressure were to be eased in the name of a hasty peace, the risk is what Ukraine warned about: legitimizing aggression and paving the way for new invasions. Sanctions do not stop missiles, but they can shape the context in which diplomacy operates./ Adapted from “Pamphlet” by “Linkiesta”
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