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from https://www.independent.co.uk/news/world/europe/russia-economy-oil-russia-ukraine-war-putin-zelensky-b2811432.html

We had one chance to sink the Russian economy and we blew it – Putin
knew we would
Despite Europe’s pledge to stand side by side with Ukraine, many of Zelensky’s allies couldn’t stomach the one sacrifice it would take to
cause Putin real harm: to give up his oil and gas completely, writes
Owen Matthews

Thursday 21 August 2025 04:47 BST
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Putin's reaction as reporter confronts Russian president on civilian
killings
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.

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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.

Donald Trump greets Vladimir Putin as he arrives at Joint Base Elmendorf-Richardson in Anchorage, Alaska last Friday
open image in gallery
)
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.

Until January this year, Russia’s state-owned energy giant Gazprom
earned money from the gas flowing through Ukraine’s pipeline network
open image in gallery

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.


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