Introduction
As the war in Ukraine enters its fourth year, new data reveals a paradox that continues to undermine Western efforts to support Ukraine: Russia is still earning billions from fossil fuel exports, even from countries imposing sanctions. These revenues play a crucial role in financing the Kremlin’s ongoing military aggression, exposing significant gaps and loopholes in the global sanctions regime.
Fossil Fuels Powering the War
According to data from the Centre for Research on Energy and Clean Air (CREA), Russia has earned over €883 billion in fossil fuel exports since its full-scale invasion began in February 2022. Of this, €228 billion came from sanctioning countries — mainly in the EU, UK, and US.
Oil and gas revenues constitute about a third of Russia’s state income and 60% of its export revenue. These funds continue to power military operations, even as Western governments vocalize support for Ukraine.
Sanctions Loopholes and “Refining Laundromats”
Despite sanctions on seaborne crude and pipeline restrictions, Russian oil still reaches the West via third-party refiners in Turkey and India. Known as the “refining loophole,” this process allows Russian crude to be processed into fuels and re-exported legally to Europe and North America.
CREA has identified at least six major refineries involved in this laundering process. These “laundromat refineries” have collectively handled more than €6.1 billion worth of Russian oil.
Western Dependence and Policy Challenges
While EU leaders aim to eliminate Russian gas imports by 2027, resistance from countries like Hungary and Slovakia — who still rely on piped gas — is slowing progress. Moreover, liquefied natural gas (LNG) exports from Russia to the EU surged in 2024, even setting record highs. This highlights how economic dependency continues to override strategic objectives.
Former Russian energy minister Vladimir Milov emphasizes that sanctions like the G7 oil price cap are poorly enforced and need reinforcement. He also warns that political instability in the West, such as policy rollbacks under a second Trump administration, could further weaken sanction mechanisms.
Expert Voices and Energy Market Fears
Analysts from Global Witness and CREA argue that Western governments fear energy market disruptions more than Russian aggression. They warn that short-term fuel affordability is prioritizing comfort over conscience, leaving a war chest wide open for Putin.
“This dependence on fossil fuels means we’re funding both sides of the war,” says Mai Rosner of Global Witness. “It’s both a moral and geopolitical failure.”
What Needs to Happen
- Enforce the oil price cap rigorously across all shipping, trading, and insuring channels.
- Close the refining loophole by banning imports of fuel products refined from Russian crude.
- Ban Russian LNG imports and invest in alternative energy sources for rapid decoupling.
- Crack down on the “shadow fleet” of tankers used to bypass sanctions.
Conclusion
As the war drags on and global energy markets remain volatile, it’s clear that real action on fossil fuel sanctions is long overdue. Words of condemnation are meaningless if billions continue flowing into the Kremlin’s coffers. The path forward must include bold energy policy shifts and stricter enforcement mechanisms to truly starve Russia’s war machine.
