Europe gets tougher on Putin
Brussels' latest sanctions package ratchets up economic pressure on Moscow by closing loopholes and punishing foreign companies that circumvent them. Europe has already ended most of its Russian natural gas imports by pipeline. Oil tankers that are insured by European companies are also prohibited from transporting Russian crude sold at more than $60 a barrel.
The goal has been to weaken Russia's war machine by reducing its oil and gas revenue while minimizing the pain for Europe. But Russian oil and gas have continued to flow to global markets by other channels. Russia has deployed uninsured shadow fleets to sell crude to refineries in India and Turkey, which export fuel back to Europe.
The price cap also has less effect now, when crude is trading around $65 a barrel, than when it took effect in December 2022 and crude fetched $80 a barrel. Friday's package will lower the price cap to $47.60 a barrel, which will be revised every three months, and restrict imports of refined fuel that is produced from Russian crude.
Europe will further isolate Russia from the global financial system by kicking 22 Russian banks out of the Swift financial-transfer network. It will sanction two Chinese banks that have helped Russia circumvent sanctions and a large oil refinery in India that is partially owned by Russia's state-run oil company Rosneft.
Europe is also telling Mr. Putin not to count on reviving the Nord Stream gas pipelines between Russia and Germany. The pipelines were damaged in an underwater explosion in 2022, but some U.S. and European investors are eager to repair and restart them once the war in Ukraine ends. German Chancellor Friedrich Merz isn't so keen. The new sanctions will bar transactions that could revive or repair the pipelines.
Mr. Merz and other European leaders deserve credit for their resolve, though lower oil and gas prices helped by increased U.S. production have made this easier. Venture Global signed a 20-year contract on Wednesday to supply LNG to Italy's Eni from its new Louisiana CP2 export facility.
Sanctions are no substitute for the weapons Ukraine desperately needs. But Russia's economy is showing signs of trouble with interest rates near 20% to contain inflation. Bloomberg News this week reported that executives at some of Russia's biggest banks have discussed the possibility of seeking state bailouts if more loans on their books default. All of this suggests the West's economic leverage over Moscow is growing if countries unite to use it.
President Trump could join this effort by backing a bipartisan Senate bill that would empower him to impose 500% tariffs on countries that purchase Russian oil and gas products. He could also work with Europe to confiscate some $300 billion in Russia assets frozen in the West to buy weapons for Ukraine. There's no good excuse for Mr. Trump not to follow Europe's lead now and put more pressure on Russia to negotiate a cease-fire.
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