Oil Wins but Ukraine loses War
On 24 October 2025, the United States sanctioned Russian Oil again. Russia’s two largest oil exporting companies have been black listed. The announcement came with stern rhetoric about consequences for the war in Ukraine. But the timing revealed a different priority. Oil prices had fallen below $57 per barrel. American shale producers were screaming. The sanctions rescued them while boosting prices for Russia too.
Trump welcomed Putin to Anchorage in August with red carpets and fighter jet flyovers. Putin had an International Criminal Court arrest warrant, yet he rode in the presidential limousine. The summit produced warm words but no agreements. Behind the scenes, ExxonMobil and Rosneft held quiet talks about restarting joint operations. Oil prices sat comfortably around $75 to $80 per barrel then. Nobody panicked.
Six weeks later at the UN General Assembly, Trump reversed course completely. Ukraine could “fight and WIN all of Ukraine back,” he declared. Russia was a “paper tiger fighting aimlessly.” This contradicted everything he’d said about territorial concessions for months. The speech came with zero new military aid, just words. Oil prices had started sliding toward $60.
By mid-October, Putin and Trump spoke for two and a half hours by phone. A Budapest summit was announced. Diplomacy seemed back on track. But oil had fallen through $60, heading toward $57. That’s where U.S. shale producers panic. Most Permian Basin wells need $58 to $60 just to break even. New drilling requires sustained prices above $65. Below that, companies face shut-ins and bankruptcy. Congressional delegations from Texas, North Dakota, and Oklahoma sent urgent signals to Washington.
Five days after the phone call, the summit was canceled. Hours later, Treasury sanctioned Rosneft and Lukoil. Oil prices jumped 5% immediately. Analysts at RBC Capital noted Washington had chosen “a strategic moment to act against Moscow while safeguarding U.S. drivers.” The timing wasn’t about Ukraine.
Sanctions are not connected with Ukraine war, sanctions are connected to price discovery of oil.Boost to Russia’s Profit
Higher oil prices help Russia more than sanctions hurt it. Russia’s production costs run $20 to $30 per barrel for established fields, so every dollar above $40 is profit. The country typically sells oil at a $5 to $15 discount because of sanctions risk. When global prices rise from $57 to $65, Russia’s discounted price rises from roughly $50 to $58. At $57 per barrel with 10 million barrels exported daily, Russia earns about $208 billion yearly. Cut exports by 10% but raise prices to $65, and Russia still earns $213 billion. The war gets more funding, not less.
The U.S. knows the sanctions won’t stop Russian oil sales. Shell companies appear faster than Treasury can designate them. The UAE, Turkey, and China have no reason to enforce American rules. Shadow fleet tankers operate outside Western jurisdiction. Ship-to-ship transfers hide origins. But leaky enforcement serves American interests because it keeps enough Russian supply flowing to prevent prices spiking above $80 or $90, which would anger voters. Yet prices stay high enough to sustain shale producers. Russia keeps selling, America keeps pumping, both win.
The zigzag pattern wasn’t chaos but price discovery. Each move tested market response. Could Trump be friendly to Russia while keeping prices stable? Yes, at $75. Could rhetoric alone support falling prices? No. How low would prices go without intervention? Too low at $57. The sanctions provided minimum intervention to boost prices without cutting Russian supply.
There’s no Ukraine strategy because Ukraine isn’t the priority. The actual policy is using Russia sanctions as an oil price thermostat. Turn it up when shale needs help, turn it down when voters complain about gas prices. Keep prices between $60 and $70 per barrel. That range sustains American producers without triggering inflation panic, but it also funds Russia’s war machine.
Ukraine gets rhetoric, not resources. The sanctions let Washington claim toughness while avoiding escalation or meaningful military aid. European allies were told the U.S. had taken decisive action. Ukraine was told to be patient. Meanwhile Russia earned higher revenues from every barrel sold.
Washington announces tough measures that generate headlines. Enforcement is deliberately porous to maintain supply. Prices rise just enough to help Russian and American producers. Shell companies absorb the arbitrage spread. Nobody seriously tries to stop the flow. Both governments understand this arrangement. The sanctions theater allows Trump to look strong domestically while oil markets stay balanced. Putin accepts the performance because higher prices compensate for modest volume reductions.
The October sanctions weren’t a failure of strategy but successful execution of the actual strategy, which has nothing to do with Ukrainian territorial integrity. Oil economics override security policy. The war continues because continuation serves both sides’ energy interests better than resolution would. Ukraine isn’t losing because of policy mistakes but because it was never the priority. Oil wins, war wins, Ukraine loses.