More than four years have passed since the start of Russia’s full-scale invasion of Ukraine. During this time, the West has imposed tens of thousands of sanctions against Russian officials, state-owned companies, banks, oligarchs, and enterprises in the military-industrial complex. These sanctions are described as unprecedented, and there is a grain of truth to that claim. At the same time, Russia is still capable of carrying out massive shelling of Ukraine. Despite more than 1,600 days of economic pressure from the West, Moscow has not only refused to abandon its aggression but has also managed to reorient its economy toward a war footing.
However, the summer of 2026 could mark a turning point in sanctions policy. Almost simultaneously, the European Union adopted its 21st package of sanctions against Russia, while the U.S. Senate began considering a new bill that experts are already calling the toughest U.S. sanctions measure since the start of the major war. “Hellish sanctions”—that’s how one of the bill’s sponsors, Republican Senator Lindsey Graham, who died suddenly in July 2026, described them. While previous restrictions were aimed primarily at Russia itself, the West is now increasingly shifting toward the tactic of secondary sanctions—punishing not only the aggressor but also those who help it raise funds for the war.
In brief:
- Sanctions have become the second front—how the U.S. and the European Union are trying to deprive Russia of the financial resources needed to wage war.
- A new phase of pressure on the Kremlin—why Lindsey Graham’s bill in the U.S. and the EU’s 21st sanctions package could shift the West’s approach: from punishing Russia to targeting those who help it circumvent restrictions.
- Why the Russian economy is still fueling the war—how Moscow has restructured its trade, found new markets, and created a network to circumvent sanctions.
- Ukraine’s “long-range sanctions”—how strikes on oil terminals, logistics hubs, and industrial facilities deep within Russia have become part of the effort to weaken the Kremlin’s war machine.
A procedural vote in the U.S. Senate on July 28 was symbolic. Eighty-six senators voted to begin consideration of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026. Such support demonstrates a bipartisan consensus—virtually forgotten in modern American politics—on the need to increase pressure on the Kremlin.
The bill became a kind of political legacy for Republican Senator Lindsey Graham, who had worked on the document for over two years alongside Democrat Richard Blumenthal. After Graham’s death in July 2026, his initiative was supported by both Republicans and Democrats, and President Donald Trump called for the bill to be amended to include sanctions against Iran and entities linked to “Hezbollah.”
Following a procedural vote, the bill must undergo debate, consideration of amendments, and a final vote in the Senate, then pass through the House of Representatives, and only then will it be sent to the U.S. president for his signature. At the same time, the very start of the process has sent an important political signal to both Moscow and countries that continue to cooperate with Russia.
The most important feature of the new bill lies not only in sanctions against Russian banks, high-ranking officials, or defense industry enterprises. Its key innovation is the ability to impose so-called secondary sanctions on states, companies, and financial institutions that help Russia circumvent existing restrictions or continue to purchase significant volumes of Russian energy resources.
It is precisely this provision that could prove most painful for the Kremlin. Whereas sanctions were previously directed primarily at the Russian economy itself, countries that provide Moscow with its main source of foreign exchange earnings—oil and gas exports—are now at risk. In effect, this is an attempt to force Russia’s partners to make a choice: either cooperate with the U.S. and Western markets, or continue trading with the Kremlin.
The first draft of the bill proposed imposing tariffs of up to 500% on countries purchasing Russian energy resources. Following consultations with the White House, the document was significantly revised. The final version provides for a more flexible system—ranging from 0 to 100% depending on a specific country’s policies—and decisions on tariffs will be made by the U.S. Trade Representative. Although the maximum rates have been lowered, the mechanism itself appears to be a powerful tool for economic pressure.
That is precisely why the new U.S. law is causing significantly more concern in Moscow than most previous sanctions packages. The Kremlin has already learned to adapt to direct restrictions, but it will be much more difficult to compensate for the loss of buyers of Russian oil or to deal with the reluctance of international companies to risk their access to the U.S. market.
The European Union Is Moving Toward Russia’s Financial Exhaustion
While Washington continues to consider the new sanctions bill, the European Union has already taken its own step by approving the 21st sanctions package against Russia. It is being called one of the most extensive packages since the start of the full-scale war, not only because of the number of new restrictions but also because of a shift in the very logic of sanctions policy.
While the first packages were aimed primarily at the political isolation of the Kremlin, the current ones are increasingly focused on destroying the financial and industrial foundations of Russia’s war machine.
The new package covers nearly all key sectors that enable Russia to continue the war: the banking sector, the oil industry, the military-industrial complex, cryptocurrency transactions, logistics, and international schemes to circumvent sanctions.
The new restrictions target 48 individuals and 170 companies and organizations. At the same time, the main focus is not on personal sanctions but on the infrastructure that allows the Kremlin to receive foreign currency inflows.
The financial sector took the hardest hit. The European Union froze the assets of nearly a hundred banks and financial institutions and significantly expanded the list of Russian credit institutions prohibited from conducting financial transactions with European partners. For the first time, sanctions have affected the cryptocurrency infrastructure on such a large scale—crypto platforms registered in Georgia, the United Arab Emirates, Panama, Nigeria, Belarus, and the Marshall Islands have been subject to restrictions. According to European intelligence agencies, it was through these platforms that some of the payments were routed, allowing Russia to circumvent financial restrictions.
The blow to the energy sector was no less significant. Sanctions were imposed on oil refineries in Russia and Belarus, companies engaged in the trade of petroleum products, as well as traders involved in transporting Russian oil to global markets.
The EU has paid particular attention to the so-called “shadow fleet”—hundreds of old tankers that Russia uses to circumvent the oil embargo and the price cap set by the G7 countries. More than four dozen such vessels have been added to the sanctions list, but this registry remains incomplete.
It is precisely this “shadow fleet” that has now become one of the main tools for the survival of the Russian economy. A tanker changes its flag, owner, insurance company, and shipping route several times, after which the oil is mixed with other grades and sold as a product of unknown origin. In this way, the Kremlin has circumvented some Western restrictions for years, reaping billions in profits even after the oil embargo was imposed.
However, the sanctions policy is increasingly extending beyond Russia’s borders. For the first time, the European Union has imposed such sweeping restrictions on companies from third countries that help Moscow procure Western technologies.
The sanctions lists include companies from China, India, Kazakhstan, Kyrgyzstan, Turkey, and the United Arab Emirates. It was through these companies that Russia obtained microelectronics, dual-use equipment, high-precision machine tools, and other components necessary for the production of missiles, drones, and modern weapons.
In fact, Europe is increasingly shifting toward a policy of secondary sanctions—that is, punishing not only the aggressor country but also those who help it circumvent existing restrictions.
However, the main question remains unanswered: if sanctions are constantly being tightened, why is Russia still able to launch dozens of missiles and hundreds of drones at Ukraine almost every night? The answer lies in the double standards of European politicians and their desire not to jeopardize their own interests. For example, no sanctions were imposed on Russian fish, and the head of the Russian Orthodox Church, Kirill (Gundyayev), received an indulgence from both Italian Catholics and Bulgarian Orthodox Christians.
It is precisely the answer to this question that is increasingly being echoed in statements by Ukrainian leaders. Ukrainian President Volodymyr Zelenskyy has repeatedly emphasized that the current shortage of interceptor missiles for the Patriot systems arose not only because of the intensity of Russian attacks, but also because sanctions failed to halt Russian military production quickly enough. According to him, Moscow continues to ramp up production of ballistic missiles, and international restrictions have not yet cut off all supply channels for the necessary components. These components are constantly being found in the debris of Russian missiles.
That is precisely why sanctions today are increasingly becoming not a political gesture, but a matter of military security. Every microchip that reaches Russia in circumvention of sanctions could become part of a missile fired at a Ukrainian city. Every tanker that unimpededly exports Russian oil represents additional millions of dollars that replenish the Kremlin’s military budget and increase the threat to the civilized world.
Effective sanctions are an attempt—perhaps the last one—to bring the aggressor country to the negotiating table. The EU’s High Representative for Foreign Affairs and Security Policy is counting on this. After the adoption of the 21st sanctions package, Kaja Kallas said: “With each round of sanctions, we are increasing the pressure on the Russian economy and its ability to continue the war. Russia will only come to the negotiating table when the cost of the war becomes too high for it.” However, Putin’s actions time and again contradict the expectations of the European politician.
The position of the Polish Center for Eastern Studies (OSW) is also noteworthy. Its experts note that the 21st sanctions package is aimed less at imposing new sanctions and more at closing loopholes through which Russia has been circumventing previous restrictions. At the same time, analysts say that due to compromises within the EU, the package turned out to be milder than originally planned. This is a dangerous trend that has intensified against the backdrop of regime changes in a number of post-socialist republics (Bulgaria, Hungary) and the approaching elections in Italy, Poland, and France,
Why haven’t sanctions stopped the Russian war machine yet?
After the imposition of unprecedented Western sanctions, many experts predicted the rapid collapse of the Russian economy. It was assumed that the loss of access to Western technology, financial markets, and energy revenues would prevent the Kremlin from financing the war for long. However, these expectations have only partially materialized.
Russia’s economy has not collapsed. On the contrary, it has transformed into a war economy, where an ever-increasing share of state resources is directed toward arms production, funding the military, and supporting the defense industry. According to estimates by international think tanks, Russia’s military spending is now at its highest level since the collapse of the Soviet Union and exceeds 6% of GDP. In the federal budget, nearly one in every three rubles is linked in one way or another to the war.
One reason for this is that Moscow began restructuring its foreign trade as early as 2022. The European market was gradually replaced by Asian countries, primarily China and India, which became the largest buyers of Russian oil. At the same time, the Kremlin has built an extensive network of intermediary companies in Turkey, Kazakhstan, Kyrgyzstan, the United Arab Emirates, and other countries. It is through these companies that microchips, electronics, machine tools, optics, and other components are procured—components without which modern missile production would be virtually impossible.
Another tool for circumventing sanctions has been the so-called “shadow fleet.” Hundreds of tankers, registered to front owners and flying the flags of third countries, transport Russian oil while concealing its origin. The situation in the military-industrial complex is no less telling. Despite export restrictions, Russia has managed not only to resume production of cruise and ballistic missiles but also to significantly increase the output of attack drones. Massive attacks on Ukrainian cities, during which hundreds of drones and dozens of missiles are deployed simultaneously, have clearly demonstrated that sanctions have not yet been able to completely cut off the Russian defense industry’s access to critically important components.
The key to the increase in Russian budget spending is the Kremlin’s powerful propaganda campaign and the lack of domestic pressure from society. Tens of millions of Russians live by the principle, “We didn’t live well before, so there’s no point in even trying,” and this gives Putin and his inner circle free rein.
This is precisely what Ukrainian President Volodymyr Zelenskyy has repeatedly emphasized. In an interview with the British television channel Sky News, he stated outright that sanctions against Russian military production have proven insufficiently effective. According to him, Russia continues to ramp up production of ballistic missiles, while Ukraine faces a shortage of interceptor missiles for its Patriot systems.
“Ukraine’s domestic production allows us to shoot down drones and much more, but we cannot shoot down ballistic missiles. That is precisely why we need to limit Russia’s ability to produce such missiles much more quickly,” the head of state emphasized.
In fact, Zelenskyy drew attention to a key problem with current sanctions policy. Restrictions must not only be numerous but also sufficiently swift and comprehensive. If months or even years pass between the adoption of sanctions and their actual impact on production, the Kremlin has time to adapt, establish new logistics routes, and find alternative suppliers.
That is precisely why the latest decisions by the U.S. and the European Union are increasingly directed not only against Russia itself, but also against the entire international network that helps it circumvent the restrictions.
Sanctions target banks, logistics companies, traders, cryptocurrency operators, and third-country enterprises that have become part of Russia’s wartime economic ecosystem.
However, while diplomats are finalizing new sanctions lists, Ukraine is increasingly employing another method of economic pressure—high-precision strikes on targets that directly finance Russian aggression. In military and expert circles, these are already being called “long-range sanctions.” Both Ukrainian military officials and politicians are increasingly referring to them. While international sanctions gradually deprive Russia of revenue, Ukrainian drones are increasingly doing so literally overnight.
That is precisely why an increasing number of military experts are saying that modern warfare is not fought solely on the battlefield. It is also waged in banking systems, on oil exchanges, in seaports, at railway hubs, and even in manufacturing facilities where microchips for missiles are produced. And the more closely the allies’ economic pressure is combined with Ukraine’s ability to strike the aggressor’s critical infrastructure, the less capable the Kremlin will be of sustaining the intensity of hostilities, and the sooner this will lead to the aggressor country’s defeat.
Author: Svitlana Mialyk
