Putin is about to feel real sanctions pain

Shadow fleet sanctions are only just about to start hitting Russia in a material way

How and when the West imposes sanctions on Russia is a bit of a black box. This week’s posts have made two points: (i) there’s a severe lack of coordination across the US, EU and UK, so that - even though 508 vessels are now sanctioned - only 43 are sanctioned jointly by all three jurisdictions; (ii) the vast majority of these sanctions have hit only very recently, so it’s far too early to make any kind of verdict, especially a negative one. We’re observing a genuine policy experiment in real time. I’m optimistic Russia’s war economy is about experience real pain.

The chart is a visual representation of everything that’s been going on with sanctions on Russia’s oil tankers. It shows the number of vessels that have been sanctioned since Russia invaded Ukraine in February 2022, depicting how many ships are sanctioned only by the US (blue), the EU (red) and the UK (orange) and how many ships are sanctioned by two or more of these jurisdictions.

The reality is that - although sanctions have been talked about for many years - they’re only really kicking in this year in a material way. We’re observing a policy experiment in real time and it’s far too early to reach any kind of conclusion, especially a negative one. In my final post in this series tomorrow, based on the data available through now, I’ll show evidence that US sanctions completely shut down activity in target ships, with EU and UK sanctions also packing a punch. Russia’s war economy is therefore likely to be experiencing real and mounting pain at this moment.