The plan appeared particularly audacious on paper. Without a single soldier crossing a border, undermine the economic foundation of Russia’s military operations and compel a change in conduct. That was the plan behind NATO’s broad sanctions, particularly the most recent one, which was aimed at isolating Russia and was honed with secondary limitations. Months later, however, we are witnessing Moscow not only endure, but also adapt remarkably well.
Russian energy, which used to mostly go to Europe, is now widely available in Asian markets. Russia has kept its economy booming by rerouting its oil exports. Despite having lower prices, sales to China and India are turning out to be surprisingly lucrative. Even modest growth feels like quiet defiance now that the ruble has somewhat stabilized.
Russia made long-term investments to keep itself independent of the West. These weren’t random actions. Moscow created a sort of economic bunker—masking its typical bravado—by increasing food independence, growing domestic manufacturing, and moving reserves away from dollars. We have witnessed the activation of that insulation in recent months.
Russia has greatly decreased its exposure to sanctions by utilizing alternative systems like China’s CIPS and regional banks. Previously perceived as a financial guillotine, the SWIFT ban now seems more symbolic. In actuality, Moscow’s approach appears to be predicated on the idea that you should construct a new home if you are unable to enter through the front door.
In the meantime, it is becoming more difficult to overlook Europe’s economic burden. In several nations, the cost of electricity has increased. Farming communities have been particularly affected by fertilizer shortages associated with ammonia exports. Steel shortages are a problem for Germany’s automotive industry. The manufacturing output of France has decreased. These are problems at the kitchen table, not abstract trends.
In Lyon, I had an off-the-record conversation with an executive in the energy sector who disclosed that their company had begun covertly sourcing materials through third-party distributors who had indirect ties to Russia. He declared, “The paperwork is clean.” “However, everyone is aware of its true origin.”
This kind of calculated, legalistic, and morally dubious workaround is becoming more and more prevalent. The networks intended to undermine sanctions compliance teams also expand in size. What’s happening is more of a maze than a blockade, with trade continuing but in a more costly and opaque manner.
It’s interesting that the political impact within Russia has not been as anticipated. The purpose of sanctions was to isolate leadership, incite discontent, and erode public support. Rather, Putin’s popularity has increased. It’s more complicated than that, but some blame strict media control for this. Economic nationalism has been sparked by the portrayal of sanctions as external punishment, particularly among younger Russians who previously looked west.
I started thinking about a friend from my time at university in St. Petersburg who used to write essays about the cultural allure of Europe. In her most recent post, she commended Russia’s “economic courage” and small farmers’ tenacity. I didn’t think that pivot was arbitrary. It seemed to me to be the exact result that policymakers had not anticipated.
The Global South is seeing an increase in opposition to the pressure of sanctions. The reasoning of countries like South Africa, Brazil, and India is remarkably similar: we didn’t pick this fight. These nations are putting export prospects, fertilizer availability, and energy access ahead of Western diplomatic alignment.
NATO runs the risk of offending allies it depends on for long-term stability if secondary sanctions are applied to these trade partnerships. The sanctions might be promoting the development of parallel alliances rather than isolating Russia. For example, BRICS is subtly gaining traction as a substitute for Western-led frameworks, especially among economies that feel constantly marginalized.
The expense of compliance is becoming especially onerous for companies that operate in international markets. SMEs are dealing with supply bottlenecks and skyrocketing insurance premiums, particularly those in industrial manufacturing or logistics. They are now forced to either avoid trade or make significant investments in compliance infrastructure due to the serious consequences of even an unintentional violation.
Frustration is quietly growing in the United States. Key fertilizers are becoming more expensive for farmers. Longer procurement cycles have been reported by tech companies that depend on rare-earth metals. High prices for imported goods are being reported by retailers. All of this is taking place during an election year, when political instability is a direct result of economic pressure.
More importantly, the endgame is becoming increasingly unclear. Do sanctions serve as a tool for regime change, negotiation, or containment? Secondary goals and diplomatic posturing have obscured the original objective, which was to stop the war in Ukraine. The sanctions run the risk of becoming permanent fixtures with no quantifiable benefits in the absence of clearly defined outcomes.
Russia adjusts on the ground. At sea, oil tankers change their flags. Large companies change their names to local ones. Lookalikes are taking the place of Western fast food chains. Despite their apparent insignificance, these substitutions have a crucial psychological function: they indicate survival.
What started out as a self-assured demonstration of economic might is now turning into an endurance test. And despite its power, NATO has to face the possibility that excessive use of financial pressure may be making an adversary stronger rather than weaker.
The sanctions regime might be hastening its competitors’ strategic independence rather than undermining them. This paradox has previously been resolved. Suffocating economic policies can occasionally spur innovation, strengthen resolve, and broaden alliances. There have been many such reversals throughout history.
The path ahead requires accuracy. Sanctions that are applied broadly can have unexpected repercussions. However, NATO can steer toward a more stable outcome by simultaneously investing in diplomatic backchannels and targeting crucial chokepoints.
Sanctions are not intrinsically bad. However, they must be extraordinarily successful without being overly ambitious if they are to succeed in the long run. Pressure must be combined with strategy in today’s precarious economic environment, and surgical intention must take the place of blunt force.