Don’t Expect New Sanctions on Russia to Do Anything

Although, in the wake of attacks by Iran-supported groups in the Middle East, a senior White House adviser claimed that “extreme sanctions” had throttled the Iranian energy sector, a New York Times investigation reported that the country was still exporting billions of dollars of oil. The investigative report—complete with substantial photographic evidence of sanctions evasion by oil tankers coming from Iranian ports or transshipping oil to other tankers at sea—blows a big hole in the White House narrative of effectively ratcheting up the pressure on Iran for its proxies’ attacks on U.S. military activities in the region.

The Times reported that the end-run around sanctions is occurring by the tankers, insured for liability by a U.S. company, spoofing their GPS locations by broadcasting fake locations while picking up oil at Iranian ports or transferring Iranian oil to other nations’ tankers at sea. Shipowners willing to violate the sanctions get a premium on their normal commissions and importing countries choosing to ignore them—in this case, China—get oil at a cheaper price than normal.

Similar evasion has occurred with trying to limit Russian exports of oil in the wake of its 2022 invasion of Ukraine. In that case, because Russia is such a big oil producer, the aim was not to choke off all its oil exports—which could have resulted in a sustained elevation in the world price of oil, thereby endangering the election prospects of certain Western politicians—but to create a price ceiling under which only Russian oil could be sold. Enforcing this price ceiling regime is difficult too. Spoofing tanker locations and oil transfers at sea can also help hide the origin of Russian oil to evade the price ceiling. The Times also found spoofing on cargoes of sanctioned Venezuelan oil exports.

And economic sanctions on oil exports are not the only ones that can be flouted. Sanctions can be unilaterally imposed or multilaterally promulgated by a cartel of countries. Unless a single country imposing the sanctions has a monopoly (is a single seller) or a monopsony (is a single buyer—in which case unilateral sanctions might substantially raise or lower the price of the product, respectively, thus hurting target country—unilateral sanctions usually are merely symbolic to indicate displeasure with target by the sanctioning nation. Getting other countries to go along with sanctions to form a sanctioning cartel—as the United States normally attempts—can increase the price effects but rarely can completely cut off the target from importing or exporting target products because of the evasion techniques, including those above.

Multilateral sanctions take more time to coordinate and implement than unilateral sanctions and may bite for a while, but then most target countries learn ways to substantially evade them over time. The sanctions against Russia for its invasion (and likely the ones to be imposed for the death of dissident Alexei Navalny), and on Iran and Venezuela for behaviors the United States doesn’t like, have all had some economic effect, but they cannot be evaluated for success solely by short- or long-term economic pain inflicted. They have in fact not radically changed those countries’ actions.

Economic sanctions are economic punishments used to achieve political ends. Even if the sanctions are comprehensive (on all exports and imports of the target nation), very multilateral with many countries participating, and thus inflicting excruciating economic pain for a time, they often fail politically. Sanctions are usually more successful with limited goals—for example, getting a target nation to stop a minor specific behavior. They are usually unsuccessful in achieving major changes in target policy or governance.

Some of the most severe sanctions ever deployed did not compel Saddam Hussein to rescind his invasion of Kuwait in 1990, have not yet motivated Vladimir Putin to withdraw his invasion force from Ukraine, and have not caused Iran or North Korea to end their nuclear programs and behave better internationally. Sanctions from abroad may have had some role in getting South Africa to abandon apartheid, but forces internal to the country were the driving force behind it.

So, if economic sanctions can have a high cost to both sanctioning and target nations and don’t have a high success rate in achieving major political goals, why do countries—especially the United States, the leading user of such tactics—still use them? The answer is that sanctions have symbolic value. In the sanctioning country, imposing sanctions to show concern about the target nation’s policy to the watching international community—and, most importantly, to important internal political audiences—is often a middle ground between a seemingly lame diplomatic protest and an over-the-top military or covert attack on the target.

Many times, policymakers choosing the Goldilocks option of sanctions may not even believe the measures are likely to achieve their political goal or even, considering likely rampant evasion, cause much economic distress on the target; nevertheless, they are relatively sure that the purported economic punishment will serve the symbolic goal of showing that they are “doing something” about the target’s outrageous behavior. The sanctions for Navalny’s death aren’t really aimed at Russia, then; they’re aimed at you.