Back in February, just a few short weeks ago, Ukraine’s western allies were planning a further blow against Russia’s primary source of revenue, oil. European Commission President Ursula von der Leyen noted that ‘Russia will only come to the table with genuine intent if it is pressured to do so’, promising the introduction of ‘a full maritime services ban for Russian crude oil [that] will slash further Russia's energy revenues and make it more difficult to find buyers for its oil’. More ships were to be sanctioned by the EU – and indeed were by the UK – and the oil price cap, the cause of such blatant and ongoing sanctions circumvention by Russia was to be essentially rendered redundant.

European nations were also displaying increased willingness to board – although not seize – tankers supporting Russia’s circumvention of oil-related sanctions, with action by France and Belgium and tough talk (but no action) from the UK too.

At this time the price of (Brent crude) oil was approximately $65 per barrel, Russia was making little profit from its sales and the global oil market was loose.

Fast forward six weeks, throw in an intense aerial bombardment of Iran by Israel and the US, retaliatory air strikes by Tehran against Israel and Arab neighbours (including against their energy production installations), and the effective closure of the world’s energy aorta, the Straits of Hormuz, despite a tentative ceasefire, and the picture – and decision calculus of the Western sanctions coalition – looks very different.

Consequences of the War with Iran

The most obvious change is the oil price, up by nearly 70% at one point, and hovering around $100 per barrel. For reference, when policymakers were designing the oil price cap against Russia in late 2022/early 2023, the global oil price was trading in a similar range, and the argument against a full oil embargo and maritime services ban was rooted in the ‘tight’ nature of the market at that time and the impact tougher measures would have on the energy security of countries far from the conflict in Europe.

The extent to which crypto activity supports Russia’s war effort is clear, yet repeated initiatives to elevate the importance of opening a concerted line of effort on this issue are ignored

Oil from elsewhere in the world, chiefly the Middle East, was anticipated to compensate for restrictions placed on Russia’s exports. While Gulf markets may have supported the needs of countries within the sanctions coalition, others – notably India – provided new sales capacity for Russia, increasing its purchases and funding of the Kremlin’s war from 2.5% of its annual need prior to the full-scale invasion, to a peak of nearly 40% in the years that followed.

The continued ability of Russia to sell its oil to fund its illegal war of aggression in Ukraine frustrated western policymakers. Even President Donald Trump, in his only meaningful sanctions move against Russia since his inauguration, designated Lukoil and Rosneft, two of Russia’s most significant oil producers, in October 2025.

Yet, events have conspired against Ukraine’s allies. First the continued disinterest of the White House in using its sanctions powers to support Ukraine; second the spoiling actions of Hungarian President Viktor Orban curtailed the EU’s ability to deliver its well-telegraphed 20th sanctions package to mark the fourth anniversary of Russia’s full-scale invasion of Ukraine; and then the Netanyahu/Trump adventurism in the Middle East presented Western leaders with a dilemma: act harder against Russia’s main source of military funding and risk exacerbating the global energy crisis, or watch as the spiralling oil price provides Russia with an income windfall that boosts its military coffers.

So far, Europe’s response has been one of mere paralysis.

While now may not be the time to ramp up further pressure on Russian oil and thus the global oil market, there is an obvious way forward – dedicated, renewed and increased effort to stopping Russia spending its funds.

Sanctioning Russia's Cryptocurrency

Over the past four years, Western diplomats have travelled the globe, deploying diplomatic charm in an attempt to stop Russia using third countries to circumvent export controls. This has resulted in some success, but as Russia has ramped up its use of cryptocurrency to pay for much needed critical military items, primarily from China, the West has failed to adapt its response. Ad hoc sanctions have been brought forward, but a systematic effort to identify and disrupt the crypto-based payment methods used by Russia has been almost entirely absent. Why is this? There is certainly no shortage of evidence of Russia’s crypto activities.

A small and under-resourced band of investigators works tirelessly to uncover all the information needed to mount a concerted campaign of disruption against the wallets, exchanges and other tools involved in this Russian payment activity. It just needs the policymakers to show willingness to engage with this community, something that remains curiously absent. The extent to which crypto activity supports Russia’s war effort is clear, yet repeated initiatives to elevate the importance of opening a concerted line of effort on this issue are ignored. This must change.

The war in the Middle East has de-railed the active commitment of Ukraine’s allies to maintaining economic pressure on Russia. The Ukrainian people need more than words and visits of support, they need the Western sanctions coalition to rediscover its vision. The answer is simple: it is time to finally take Russia’s use of cryptocurrency seriously and apply the same effort to disrupting the Kremlin’s spending as it has done to its revenue raising.