The Sanctions That Backfired
Trump’s oil embargo was meant to isolate Russia. Instead, it’s handing China the keys to a new world order.
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1 Trump’s Sanctions Admit What His Diplomacy Won’t
The critical near-term consequence of the latest US sanctions against Russian oil exports lies not in crude prices or disrupted Indian supply chains, but in what this signals about the collapsed diplomatic engagement.
President Trump cancelled his planned Budapest meeting with Vladimir Putin, stating that “it didn’t feel right” and lamenting that ”every time I speak with Vladimir, I have good conversations, and then they don’t go anywhere.”
After months of Putin-pleasing procrastination, he finally wheeled out the first major sanctions package against Russia since resuming office.
Indian refineries have begun withdrawing from Russian crude purchases, with spot negotiations for Urals cargoes notably subdued since mid-October, when Trump claimed that Prime Minister Modi had pledged to halt Russian crude imports.
The market had anticipated this development before any formal announcement. The 21 November wind-down deadline is the moment of reckoning, but more significant is Trump’s acknowledgment that his approach has stalled, and a return to economic coercion.
Putin’s calculation is straightforward: if Russia agrees to a ceasefire now, sanctions remain in place whilst Russia loses negotiating leverage. Russian Foreign Minister Lavrov has already rejected a ceasefire that would freeze the conflict along current frontlines—a key Trump demand.
Having promised to end the war swiftly, these sanctions represent an admission that his approach has failed. He is now committed to an economic pressure campaign that could require years to prove effective, with no clear exit strategy.
The war continues grinding through 2026 and beyond, accompanied by continued destruction of Ukrainian infrastructure, Russian adaptation to sanctions that diminishes their effectiveness, mounting European “Ukraine fatigue,” and a potential Trump pivot towards compelling Ukraine to negotiate as the politically expedient path.
2 Moscow Learns the Meaning of Monopsony
China now emerges as Russia’s sole viable large-scale oil customer.
Russian exports to Asia and Oceania have increased majorly since 2022, compensating for the precipitous drop in European purchases, which fell from just over half of Russian crude exports in 2020 to barely a tenth by early 2025.
This shift transforms Russia into a Chinese economic dependency rather than weakening it.
Beijing has gained enormous leverage over Moscow, potentially enabling it to dictate oil pricing through demands for steeper discounts, influence Central Asian policy, shape Russia’s position on its own ambitions, and extract technology transfers and military cooperation.
The most profound implication? China, not the United States, becomes the broker for any eventual Ukraine settlement. This represents precisely the opposite of what Trump intended.
Meanwhile, the European Union has approved its nineteenth sanctions package, including a ban on Russian LNG imports commencing in 2027. Combined with oil sanctions, Europe is severing itself entirely from Russian energy.
This makes Europe permanently dependent upon expensive US LNG, which grants Washington considerable leverage; geopolitically volatile Middle Eastern supplies; and African energy, which requires substantial new infrastructure investment.
Whilst this represents a geopolitical victory for the American energy sector, it leaves Europe more vulnerable to supply shocks and less competitive industrially. Germany’s manufacturing competitiveness suffers particularly acutely.
3 India Finds Strategic Autonomy Has a Price
India took over a third of its crude oil from Russia in 2025, marking a substantial departure from its historical dependence on Middle Eastern supplies.
Yet Delhi now faces a dilemma: refinery supply disruption, higher oil costs, US tariff relief conditional upon complying with sanctions, and Russia’s continued importance as a defence supplier, particularly S-400 systems and nuclear reactors.
India’s strategic autonomy doctrine faces its most severe test. Should India capitulate entirely to American pressure, it signals to the Global South that non-alignment is no longer tenable within the US-China competition. Should India discover workarounds – which it will certainly attempt – US credibility on sanctions enforcement suffers a considerable blow.
The United Kingdom and United States are pressuring companies in India and China that facilitate Russian oil reaching global markets. China has lodged formal protests over UK sanctions against its refineries.
This is the first major test of BRICS as an anti-Western bloc. Can BRICS members coordinate to resist sanctions? Will they develop joint payment and trading systems? Or will India and Brazil succumb to Western pressure, leaving China and Russia isolated?
If BRICS breaks under pressure, it discredits the “multipolar world” narrative.
If BRICS members successfully coordinate resistance, it establishes them as a genuine counter-bloc to the G7.
4 Shadow Fleets and Dollar Dumping
Russia has got better at sanctions circumvention. A shadow fleet of tankers, non-Western insurers, and closed payment systems all operate beyond G7 jurisdiction.
This is a boost for BRICS payment systems that bypass SWIFT and dollar clearing, for yuan-based oil trading, for gold and commodity-backed settlements for sanctioned trade, and for that Trump family favourite – crypto.
The long-term geopolitical consequence? Alternative financial infrastructure becomes incentivised, established and normalised.
Every sanctioned entity – Iran, Venezuela, North Korea, Russia – now shares a common incentive to construct parallel systems.
5 Sanctions Hand the Middle East Back to OPEC
With Russia weakened as an oil supplier and China absorbing most Russian exports, Saudi Arabia and the UAE regain pricing power.
OPEC+, led by Saudi Arabia and Russia, has been increasing production for months, contributing to a 16% decline in US crude oil prices this year and a nearly 14% fall in Brent crude.
If Russian oil becomes genuinely constrained, OPEC+ can reduce production to support higher prices, extract concessions from the United States on Iran policy, Yemen and the Israel-Palestine question, and play America against China as competing customers.
The United States loses leverage in the Middle East precisely because it requires the Saudis to maintain oil flows to India and Europe as Russian supplies dwindle.
6 Beijing Watches, Studies, and Prepares
This entire episode serves as a sandbox for Beijing’s own future actions. China can see how sanctions shift behaviour: whether India and other fence-sitters discover effective workarounds; whether the West can maintain enforcement discipline over years rather than months.
The lessons China draws will shape its own risk assessments. If sanctions prove ineffective or easily circumvented, Beijing’s confidence grows.
If sanctions prove devastating but avoidable through preparation, China accelerates the construction of alternative financial architecture and deepens ties with the Global South.
Either way, the strategic competition intensifies.
7 Hegemonic Weapons Cut Both Ways
These sanctions contain a fundamental contradiction.
Designed to pressure Russia towards negotiations, they make Russia more dependent on China, reducing American leverage. Raising China’s influence over Russia gives it a bigger stake in any settlement terms.
It damages US relationships with India and other fence-sitters.
It accelerates de-dollarisation, reducing future sanctions effectiveness; and locks Trump into a protracted pressure campaign with no clear idea of victory.
As the United States attempts to maintain hegemonic sanctions power in an increasingly multipolar world, it hastens the multipolar transition by providing other powers with shared incentives to build alternative systems.
Europe, and others, need to think carefully about what that means for their future.
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Adrian
This is a masterclass in geopolitcal analysis. The monopsony point is brilliant, I hadnt thought about it that way but you're absolutely right that Russia becoming dependent on China is the oposite of what the US intended. What really resonates is your point about India's strategic autonomy facing its severest test. If India caves completely, it kills the non aligned movement narrative for the entire Global South. But if they find workarounds which they absolutely will try, US credibility on sanctions takes a major hit. Either outcome is problematic for Washington. The BRICS coordination question is going to be fascinating to watch play out.
Looks like China is backing off too: Exclusive: China state oil majors suspend Russian oil buys due to sanctions, sources say - https://www.reuters.com/business/energy/china-state-oil-majors-suspend-russian-oil-buys-due-sanctions-sources-say-2025-10-23/