Two wars that Western capitals have spent years treating as separate theatres have just collapsed into a single energy equation. The US-Israeli war on Iran has driven fuel prices sharply higher, and with congressional midterms weeks away, Washington has decided to offset that shock by easing pressure on Russia. On 16 October, President Donald Trump waived a sweeping slate of Russia energy sanctions days before they were due to take effect, under a law he had signed only the month before. Earlier in October, he had already struck a deal for Russian diesel, and the Treasury waived sanctions on Russian diesel sales until April 2027.
The political reaction has focused on the rupture between Trump and Volodymyr Zelensky. The strategic consequence is larger. The Western sanctions regime against Russia, built since 2022 as a transatlantic project, now has one remaining custodian: Europe. The question is whether Europe has the tools, the money and the consistency to carry it alone.
What Washington just gave away
The measures Trump set aside were not routine. They included tariffs of up to 100 percent on all goods entering the US from the five largest importers of Russian oil or gas, a group that includes China and India. That was the enforcement mechanism the sanctions regime had always lacked. Price caps and embargoes can limit Western purchases, but only the threat of secondary penalties against major Asian buyers can meaningfully squeeze Moscow’s revenue. Washington has now shelved the one instrument that only Washington could wield, an outcome that analysis on these pages had warned of before the deadline, when it argued that the waiver was likely to become the policy.
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The beneficiaries are not hard to identify. One economist at the Vienna Institute for International Economic Studies estimates that roughly 60 cents of every additional dollar per barrel would flow into Russian state coffers as discounts on Russian crude narrow. Putin’s envoy Kirill Dmitriev greeted the waiver as a historic moment. Major buyers in Asia, meanwhile, are now less exposed to American secondary penalties.
The economic justification is thin. The EU’s economy commissioner, Valdis Dombrovskis, said the promised diesel volumes were of no macroeconomic significance and questioned whether Russia could even supply them. Energy analysts argue that the G7’s 2 October decision to release 100 million barrels from strategic reserves will matter far more for prices than anything Moscow delivers. The waiver, in other words, is less an energy policy than a political signal, and Moscow has read it as one.
The pressure has also run in the other direction. The White House pushed Kyiv to halt its strikes on Russian refineries to ease oil prices. Ukraine briefly complied, and Trump declared an energy ceasefire between the two sides, but Kyiv soon resumed its strikes, while Russia continued to hammer Ukraine’s own energy infrastructure. Ukraine is therefore being asked to give up one of its few instruments of economic pressure on Russia, partly to soften the domestic consequences of a separate war in the Gulf.
Europe’s credibility problem
European leaders have responded with firm language. At the European Council on 15 and 16 October, they formally regretted the US decision to temporarily lift sanctions on Russian diesel. António Costa insisted that sanctions on Moscow would remain in force until the war ends, and the EU is preparing its 22nd sanctions package, although the summer showed how easily the unanimity requirement can shrink a promised package to almost nothing.
But Europe enters this new role with an exposed flank. Trump has accused European governments of hypocrisy, and on energy, the charge is not baseless. Despite its near-total ban on Russian oil, the EU still imports substantial volumes of Russian gas. More than 12 million tonnes of Russian Arctic LNG reached EU ports between January and September, an increase of 9.5 percent on the same period last year. Hungary and Slovakia remain significant buyers of Russian crude under exemptions to the bloc’s ban, and France’s LNG imports from Russia more than doubled between August and September.
Under a regulation adopted in January, short-term contracts for Russian LNG were banned from April 2026, with long-term contracts following on 1 January 2027. There are real reasons why the transition has been slow, not least the energy shock from the Iran war itself. But the asymmetry is politically corrosive. Europe cannot credibly present itself as the guardian of the sanctions regime while its own purchases of Russian LNG are rising. As long as that gap persists, every European protest against Washington’s waiver comes with a ready-made rebuttal.
The money question
The second test is financial. Last year, the EU approved €90 billion for Ukraine for 2026 and 2027, a sum now widely acknowledged to be insufficient. Zelensky told EU leaders that the war will cost Ukraine €155 billion next year, and asked for at least €70 billion more from Europe. The summit agreed in principle that Ukraine’s needs must be covered, but no decision on how to fund them was taken. The Commission was instead asked to prepare proposals, which means the debate over roughly €210 billion in frozen Russian central bank assets will return, with all the legal and political divisions it brought last time.
This is where the American retreat matters most. If Washington’s sanctions pressure fades and its support for Kyiv becomes increasingly conditional, Europe is not simply filling a gap. It is underwriting a war whose economic terms another power can change unilaterally, through a single executive order. Every euro Europe commits to Ukraine is partly offset by every dollar Washington allows back into Russia’s budget. Zelensky himself has said he expects the lifting of sanctions to continue.
What Europe can actually do
Europe is unlikely to replicate the American secondary tariff threat. Its member states lack a consensus on using trade as a weapon against China, and its exposure to Chinese retaliation, demonstrated this summer when Beijing banned critical mineral exports to European defence firms after an EU sanctions package, makes such measures politically difficult. But there are three areas where it can still act, and all three are within its own control.
The first is closing its own energy loophole and making the January 2027 LNG ban stick. Russia has already expanded its fleet of LNG carriers to around 25 vessels to keep gas flowing once the ban takes effect. Enforcing the ban fully, with no new exemptions for individual member states, would strip away the hypocrisy charge and remove a revenue stream Moscow currently relies on. It would also be costly in the middle of an Iran-driven price shock, which is precisely why it would carry credibility.
The second is enforcement at sea. A significant share of Russia’s oil exports moves through a shadow fleet of ageing tankers, many of which pass through European waters. Britain’s interception of the shadow fleet tanker Smyrtos in June showed that enforcement at sea is possible, and London has since begun sanctioning Russian LNG carriers as well. A coordinated inspection and insurance-verification regime in the Baltic, the North Sea and the Mediterranean would not replace American secondary tariffs, but it would raise Moscow’s costs in a domain where Europe, not Washington, holds the geography.
The third is settling the financing question decisively. A multi-year funding commitment, whether built on frozen assets or joint borrowing, would signal to Moscow that Europe’s support does not depend on the American electoral calendar. The longer the €70 billion question stays open, the more Moscow can bet on European fatigue to finish what American transactionalism started.
A test that is no longer theoretical
For a decade, European strategic autonomy has been debated as an aspiration, often in conference halls rather than budgets. This week turned it into an operational question. The United States has shown that it is willing to trade pressure on Russia for relief at the petrol pump, and to link the outcome of the war in Ukraine to the costs of its war in Iran.
That linkage cuts directly against European interests. Europe sits closer to both wars than the United States does, absorbs more of their energy and migration consequences, and has far less influence over how either one is fought. If the price of stability in the Gulf is to be paid in leniency towards Moscow, it will be Europe’s eastern flank that carries the bill.
None of this means Washington has abandoned Ukraine permanently, and the waiver could be reversed after the midterms as quickly as it was imposed. But that reversibility is itself the lesson. A sanctions regime that can be switched off by a single executive order is only as durable as the coalition behind it. If Europe wants the pressure on Moscow to outlast the American political cycle, it will have to bear the cost of maintaining it, close the gaps in its own record, and decide whether it is willing to pay for a strategy it can no longer outsource.
