We had one chance to sink the Russian economy and we blew it – Putin knew we would

Independent

12 hours ago

In the weeks following Vladimir Putin 's invasion of Ukraine in February 2022, Europe 's leaders followed the trail blazed by Boris Johnson to Kyiv to express their undying support for the war effort. Each, in different ways, echoed the Canadian prime minister Justin Trudeau's mantra that they would give Ukraine 'as much as it takes, for as long as it takes' to resist Putin.
Johnson himself assured Volodymyr Zelensky that 'we are with you, and we are on your side' and vowed that Ukraine's right to 'choose its own destiny is a right that the United Kingdom and our allies will always defend'.
Three years later, the successors of those leaders crowded into the White House's Oval Office to applaud Donald Trump's opening of direct talks with Putin.
Despite the deaths of hundreds of thousands, and billions in military aid to Kyiv, Putin's forces continue to advance beyond the 20 per cent of Ukraine he now controls. His missiles rain nightly death on Ukraine's cities; Moscow's army launched 270 drones and 10 missiles at central Ukraine just hours after President Zelensky concluded peace talks at the White House.
Though Putin's economy is floundering, it is by no means crippled. And while Putin has failed to subjugate the whole of Ukraine to his will, he is on course to accomplish many of his war aims, including the 'liberation' of the Russian-speaking region of the country and blocking Kyiv's membership of Nato.
The West carries much of the blame for this failure. Oil and gas are the lifeblood of Russia's war machine – yet from the outset of the war, the US prioritised protecting steady world oil supplies over properly punishing Putin. Europe, too, has imposed 18 rounds of sanctions against Russia – yet itself has continued to find ways to import Russian oil, piped and liquefied gas (LNG), and refined oil products.
A large proportion of Russia's oil exports are carried in tankers ultimately owned by EU – especially Greek – shipping companies. And the shocking truth is that over the course of the war, Europeans have paid far more into Kremlin coffers in the form of payments for oil and gas than they have given to defend Ukraine.
Europe had one chance to sink the Russian economy and blew it. Since its full-scale invasion of Ukraine, Russia has pocketed nearly €1 trillion from oil and gas. After China, the EU has been the second biggest buyer of Putin's gas, handing over €260bn.
While the EU has repeatedly pledged to reduce its reliance on Russian gas, it has never actually placed any sanctions or price caps on it. Ironically, it was saboteurs rather than European governments that put the biggest dent in Gazprom 's revenues after three of the four Nord Stream undersea gas pipelines were blown up in September 2022. The culprits, according to arrest warrants issued by German police, were Ukrainians. But even after the Nord Stream sabotage, Europe quickly switched to Russian LNG exported from the Baltic terminals of Ust-Luga and Vysotsk.
Over three years of war, European leaders have promised Kyiv their support is absolute, or 'your fight is our fight,' in the words of European Commission president Ursula von der Leyen. But rather than cut off Putin's core revenues, the thing that could have really inflicted serious damage, Europeans have chosen legal workarounds.
The price of crude oil legally exported by Russia was capped at $60 a barrel – an American strategy to keep oil flowing while squeezing Russian profits. In practice, though, millions of tonnes of Russian crude were fraudulently pumped from one tanker to another with 'clean' paperwork off the coasts of Denmark and Greece. At the same time, Lukoil, Russia's largest private oil company, continues to operate refineries in the Netherlands, Romania and Bulgaria, and can with perfect legality sell its own oil to itself at capped prices, but retail the products at normal market prices.
Not wanting to make the crucial economic sacrifice that would accompany any real boycott, other European countries have opted for legal fig-leaves to disguise the true source of their energy. Hungary, Slovakia and other central European countries continue to import oil and gas via Russian pipelines – but it's labelled as coming from Kazakhstan.
Amazingly, until 1 January 2025, Russian natural gas kept flowing through Ukraine's pipeline network — set up when Ukraine and Russia were both part of the Soviet Union – to Europe, under a five-year agreement. Russia's state-owned energy giant Gazprom earned money from the gas, and Kyiv collected hundreds of millions in fees for the transit of gas to Europe via pipelines running through Ukrainian territory into Slovakia. Those payments also made Gazprom one of the largest single contributors to Kyiv's state budget.
The rest of southern Europe buys billions of piped gas via the Black Sea Turk Stream and Blue Stream pipelines that run from Russia to Turkey, but because it's mixed with gas from Azerbaijan, European customisers can claim they're buying from Baku, not Moscow. Europe now imports more refined Russian oil products than before the war, except that rather than buy directly, much of the petrol, diesel and aviation fuel is refined in India, which has more than doubled its imports of Russian crude and grown rich on the proceeds.
Oil and gas are Putin's achilles heel. He needs his economy to survive to keep his war machine running. With the pressure of war, high interest rates and an economic slowdown, another year and he would be in significant problems which would make his negotiating position weaker.
But still we cannot sever that vulnerable spot with an arrow because it's our achilles heel too. In Germany, a fateful electoral deal with a now long-departed Green coalition partner led to the closure of the country's nuclear power stations. That left Germany and its neighbours dangerously dependent on cheap Russian gas. Europe's pledges for net zero have also helped rob the continent of the excess energy capacity it would need to 'just say no' to its addiction to Putin's energy.
The price for this refusal to countenance economic suffering for the sake of Ukraine has been paid by Ukrainians in blood. When Putin launched his war he was sure that Europe's talk of international law was hypocritical nonsense – not least because he remembered that in the aftermath of his 2014 invasion of Crimea, Germany's chancellor Angela Merkel swore that 'military aggression in Europe cannot go unpunished' and yet little more than a year later signed a €9.5bn deal to build a second Nord Stream pipeline.
And though Putin has been undoubtedly surprised by the scale of Europe's military aid to Kyiv, ultimately he has been proved right about the fundamental hypocrisy.
'Ukraine must win this war,' Von Der Leyen boldly told the assembled European elites at the 2022 Davos conference. 'And Putin's aggression must be a strategic failure.'
Though Ukraine has not exactly lost the war, it certainly has not won it. And by the same token, while Putin may have failed to dominate Ukraine, he has nonetheless succeeded in snapping up large chunks of it. If a peace deal is struck, it will be on Putin's terms.
That outcome could have been very different if the actions of Ukraine's self-declared allies had been as bold as their words.