The effectiveness of US sanctions against Russia is now under intense scrutiny, with analysts debating whether they truly weaken Moscow or merely reroute its energy flows while inflicting collateral damage on Europe.
The recent escalation of US sanctions against the Russian oil sector, introduced in late October, is already producing tangible side effects. According to Bloomberg Russia’s seaborne crude shipments fell sharply, dropping by the most since January 2024. Four-week average volumes from the country’s ports were 3.58 million barrels a day to Nov. 2, according to vessel-tracking data compiled by Bloomberg, down by about 190,000 from the revised figure for the period to Oct. 26. This is the result of new US restrictions on Rosneft and Lukoil.
For Western oil giants, this has been a gift: refining margins rose by 20%, offsetting weak demand in China. Exxon Mobil reported a 15% increase in refining profits to $2.1 billion in the third quarter, while Chevron posted record margins of $8.50 per barrel. The sanctions are redirecting Russian barrels to Asia at a discount.
However, for Europe the consequences are devastating. The EU’s ban on fuel derived from Russian crude starting in January 2026, combined with US restrictions, is forcing refiners to seek alternatives at inflated prices. Germany’s diesel import costs have risen 25% since September (Argus Media), fueling inflation at a time when the ECB is preparing to ease policy.
U.S. Sanctions Strategy Backfires, Hurting Europe
As Forbes reports, while Russian gas became unpalatable to Europe after 2022, American policy has taken contradictory approaches to Russian energy companies. Sanctions have been lifted on Rosneft Germany while targeting alternative non-Russian gas sources in the Southern Caspian that Europe had cultivated – despite Russian companies like Lukoil being only minority stakeholders in these projects.
The inconsistency can even backfire to the US – Iraq’s state oil marketing company SOMO has canceled three crude loadings from Lukoil’s West Qurna-2 in Iraq this month. As SOMO exports oil both to the US and to the EU, this can bring the unwanted problems with oil supply.
Other major Lukoil enterprises in Europe, refineries, as well as projects supplying the European market with oil and gas are under threat – Shah Deniz in Azerbaijan, and Kazakh project Karachaganak that replaced Russian oil.
The case of Lukoil, according to Forbes, illustrates how these policies may be counterproductive. Lukoil’s European subsidiaries face sanctions while some of its projects with American partners remain exempt. European utility bills have already risen twice or more for some EU cities over the last several years and may rise even further.
This inconsistent approach leaves Europe caught between solidarity and survival – sanctioned when seeking non-Russian energy sources while watching as Russian companies potentially benefit from asset sales. The situation risks driving European partners toward alternative partnerships and undermines their energy safety.
Europe now faces a strategic dilemma: Washington’s sanctions, designed to isolate Russia, are eroding the EU’s energy security and industrial competitiveness and aimed more at market’s transformation instead of Russia’s isolation. Without urgent transatlantic coordination — including targeted exemptions for allied supply chains and a reevaluation of selective penalties — Brussels risks being pushed toward pragmatic deals with Beijing or other non-Western partners. Morality may guide policy, but it does not power factories or heat homes. The cost of incoherence is no longer theoretical; it is measured in rising diesel prices, stalled production lines, and a fracturing Western alliance.
