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Western sanctions are having a significant impact on the Russian economy, the EU envoy said, ahead of the fourth anniversary of Russia's full-scale invasion of Ukraine.
David O'Sullivan, a veteran Irish official, said the sanctions were "not an easy solution" and would always be circumvented, but insisted that after four years he was convinced they were having an effect.
“I’m quite optimistic. I think the sanctions have had a significant impact on the Russian economy,” he told the Guardian newspaper, adding that “by 2026, we could reach a point where this all becomes unsustainable, because a large part of the Russian economy has been so distorted by building a war economy at the expense of the civilian economy. I think the defying of the laws of economic gravity can only continue for so long.”
O'Sullivan spoke after weeks of intense Russian attacks on Ukraine's energy infrastructure, while the country is experiencing a very cold winter, with temperatures in Kiev dropping to -20 degrees Celsius this week.
Ukrainian counterparts, he said, had told him that Russia had been able to launch twice as many drones and missiles last month compared to January 2025.
But Vladimir Putin's war machine has not come without a cost to the wider economy, which is thought to be under the greatest pressure since the early days of the war. Oil revenues are falling sharply, inflation is running at around 6% and interest rates at 16%.
O'Sullivan, who has more than four decades of experience in EU institutions, was appointed EU special envoy for sanctions in December 2022 with a mandate to combat their avoidance and circumvention.
The EU has imposed 19 rounds of unprecedented sanctions on Russia since its full-scale invasion of Ukraine in 2022, targeting more than 2,700 individuals and entities, and banning trade in broad economic areas, including energy, aviation, IT, luxury and consumer goods, diamonds and gold.
The EU has been on a mission to convince other countries not to allow the resale of European goods to Russia, especially components that could be used or reused for military use.
O'Sullivan said the bloc had had some success in "preventing the direct re-export of critical weapons products" through Central Asia, the Caucasus, Turkey, Serbia, the United Arab Emirates and "to a lesser extent" through Malaysia. He said most of the circumvention was due to "economic operators who saw economic opportunities and made money" rather than being orchestrated by governments.
But China, with its “boundless” friendship with Moscow, was an exception. “China is clearly providing support” to Russia, although not in the form of direct supplies of military equipment, he said.
Several EU leaders had raised this concern with Beijing, he said. “The answer is always the same: ‘we don’t know what you’re talking about. We don’t see any problem.’”
O'Sullivan said the EU had successfully taken action to combat the Russian shadow fleet, old tankers under unknown ownership that transported Russian oil to export markets in China and India. As of December, nearly 600 ships were under EU sanctions.
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