As the Biden administration winds down, it is determined to do as much damage as possible in its final days. During the first half of January, Biden approved $8 billion in aid for Israel and sent $500 million more for Zelensky. Yet, domestic issues appear to be of a lower priority: as devastating apocalyptic fires destroy communities and lives in California, Biden jokingly says to VP Harris during a press briefing on the California fires: “Fire away...no pun intended!”.

As if escalating wars weren’t enough, the outgoing administration decided to throw good money after bad and impose yet another round of sanctions on the Russian Federation. The economic damage caused to the European Union by the previous thousands of restrictions remains largely ignored as the United States doubles down on the policies that have already proven to be unsuccessful.

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Economic and financial sanctions are a form of warfare that has become a staple in U.S. foreign policy. Sanctions are coercive measures designed to force an actor into doing what it would not otherwise do since the sender pursues its own interest at the expense of other parties. It has become clear that more than 20,000 sanctions already imposed on Russia failed to accomplish their intended objectives of weakening Russia’s economy and alienating it from the rest of the world. Nevertheless, the U.S. leaders continue to pursue policies that have proven to be a failure.

On January 10, 2025, the Biden administration imposed extremely tough sanctions on Russia, targeting its crude oil and gas industries. The latest move includes sanctions on two Russian oil giants, Gazprom Neft and Surgutneftegas, as well as more than 180 shadow fleet tankers, natural gas producers, energy traders, and oil field service providers.

According to the U.S. Department of State:

“Today, the U.S. Department of the Treasury took sweeping action to fulfill the G7 commitment to reduce Russian revenues from energy, including blocking two major Russian oil producers. The United States is imposing sanctions today on more than 200 entities and individuals involved in Russia’s energy sector and identifying more than 180 vessels as blocked property. This wide-ranging, robust action will further constrain revenues from Russia’ energy resources and degrades Putin’s ability to fund his illegal war against Ukraine.

Of these targets, the Department of State is sanctioning nearly 80 entities and individuals, including those engaged in the active production and export of liquefied natural gas (LNG) from Russia. Others include those attempting to expand Russia’s oil production capacity; those providing support to the U.S.-sanctioned Arctic LNG 2 project; those involved in Russia’s metals and mining sector; and senior officials of State Atomic Energy Corporation Rosatom.”

The European Union, without access to alternative, cost-effective energy resources, is being defacto sanctioned by the United States. On the other hand, Russia has been reorienting its economy to continue shifting towards the Global South and any negative impact will likely be minimized in the long term.

China, the biggest global importer of crude oil, has become Russia’s top exporter, and it is likely to benefit from the newly presented opportunities to negotiate advantageous deals. Although trade restrictions may result in short-term losses, the long-term implications are unlikely to be significant as Russia continues to develop closer trade and investment ties with China and other partners.

Russia-China energy trade is expected to increase as the two countries build new oil and gas pipelines, including the proposed China-Russia Crude Oil Pipeline and the already operating Eastern Siberia–Pacific Ocean Oil Pipeline. Soon, Western sanctions will become obsolete as the world accelerates its transition to multipolarity.

The new sanctions will continue to harm Europeans. The IMF has downgraded the growth outlook for the euro area. The eurozone is now projected to grow by just 0.8% in 2024, a 0.1% decrease compared to July's outlook. Meanwhile, the IMF expects the economy of Russia to expand by 3.6% in 2024 and 1.3% in 2025.

Hungary's Foreign Minister, Peter Szijjártó, recorded a video in which he openly says that the sanctions imposed by the United States will, first and foremost, make life more difficult for people in Europe and further undermine the EU's economic performance.

As economic warfare continues, sanctioned countries accelerate the development of alternative economic systems and new partnerships, while its main ally’s actions exacerbate Europe’s economic decline.

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