In 1762, during the Seven Years’ War, the situation looked dire for Frederick the Great of Prussia. The tsarist Russian army, having exhausted the Prussians, was on the march and threatening Berlin. But then the unthinkable happened: Empress Elizabeth of Russia died, and her Prussophile successor, Emperor Peter III, abruptly halted the Russian army and sued for peace, even lending Russian troops to Frederick. What Frederick called the Miracle of the House of Brandenburg remains a stark example of how political change and a new leader’s personal sympathies can suddenly upend an international conflict.

Donald Trump’s decisive victory in the U.S. presidential election may not amount to a Miracle of the House of Putin, but it does give the Kremlin a boost in its war against Ukraine. Trump is skeptical of U.S. support for Kyiv and has promised to bring the fighting to an end. His pledge to resolve the conflict “in 24 hours” may sound like braggadocio, but it reflects a growing consensus in Washington that favors a negotiated solution.

But unlike Prussia in 1762, Russia today isn’t on the ropes; in fact, its army has been gaining ground. Moscow believes that it has momentum on its side and isn’t ready to compromise. Kyiv, meanwhile, remains in the fight and is in no mood for capitulation. Turning Trump’s eagerness to end the war into a stable settlement will therefore require the West to first ramp up pressure on Moscow in order to gain leverage at the negotiating table. Otherwise, a rushed cease-fire on terms highly favorable to Russia could simply become a brief pause before the Kremlin reaches for more.

Fortunately for the West, Russia has a critical vulnerability: its economy. Many observers have accepted the lazy narrative that the sanctions imposed on Moscow at the start of the war didn’t work, and that its economy is humming along. In fact, sanctions inflicted significant damage and reduced the Kremlin’s room for policy maneuver, and now Russia’s economy is dangerously distorted as the costs of the conflict pile up. The labor supply is shrinking as hundreds of thousands of Russian men are killed or injured on the battlefield—Russia suffered 1,500 casualties a day in October. Defense spending is eating up the budget. And if Moscow’s energy revenues—the lifeblood of the Russian economy—and its imports of Western-made dual-use goods slow significantly, it may face an economic and military crisis. Tightening the sanctions noose would make Moscow’s colossal war effort less financially sustainable, and with the prospect of a sputtering war machine and domestic discontent over deteriorating economic conditions, Putin may feel pressure to accept terms more favorable to Ukraine.

Washington and its European partners can act immediately, taking advantage of the remaining weeks of U.S. President Joe Biden’s administration to pressure Russia’s access to both energy revenue and technology imports. Now that oil prices and inflation rates are dropping in the United States and Europe, Western governments should be more willing to disrupt Russian energy flows than they were in 2022. And when Trump takes office, his administration should welcome these efforts, and even build on them. Doing so would strengthen Trump’s hand in Russian-Ukrainian negotiations, benefit American energy companies, and secure political concessions from Europe—all outcomes that Trump can claim as wins.

CRACKS IN THE FOUNDATION

After Russia invaded Ukraine in February 2022, optimism that Western sanctions would paralyze the Russian economy was through the roof. The EU, along with the United States and other countries, instituted sweeping financial restrictions on Russia, including sanctions on Moscow’s central bank and far-reaching export controls. It was an impressive effort, and Biden declared that sanctions would ultimately turn the ruble “to rubble.”

Yet the Russian economy grew by 3.6 percent in 2023 and is projected to grow at the same rate in 2024. Moscow’s current account surplus—the value of its exports minus imports—will likely exceed $60 billion in 2024, up from $50 billion in 2023. Elevated oil revenues have kept its budget deficit manageable. Russia also has found ways to source Western technology for its military through third countries and to redirect much of its lost trade from Europe to China and India.

But these topline figures mask underlying economic weaknesses, exacerbated by Western sanctions. Inflation in Russia is above eight percent as the economy overheats due to heavy wartime spending and a dwindling labor supply, forcing the central bank to raise interest rates to more than 20 percent. Driving this inflation is nominal wage growth, which is expected to reach 17 percent. The unemployment rate hovers around two percent—a mind-bogglingly low number that, together with wage growth and the army’s hefty sign-up bonuses, indicates extreme competition over scarce labor. At the end of November, the ruble crashed to its lowest point in two years, a consequence of climbing inflation and diminishing inflows of hard currency—from $34 billion in March 2022 to $2 billion in September 2024—due to financial sanctions.

Russia’s budget is also under strain. The Kremlin is raising defense spending by 25 percent in 2025, to an equivalent of more than six percent of GDP; by comparison, the U.S. defense budget is less than three percent of GDP. Defense now represents a third of Russia’s state budget and more than double its spending on social services. Last year, Moscow had planned to decrease defense spending by 21 percent in 2025. The reversal suggests that Russia is under more military pressure than it anticipated.

PRESSURE POINTS

Among these economic problems are specific vulnerabilities that the West can exploit. Energy is one: oil and gas exports account for roughly a third of government revenue, and the revenues are plugging Russia’s budget gap and propping up the economy. Russia has been able to work around the oil price cap imposed by G-7 countries in late 2022, reducing the difference between Russian oil prices and global crude oil prices from $30 per barrel to $10 per barrel. Today, Russia earns $60 to $70 per barrel of oil it sells. If those revenues were pushed down to $40 to $50 per barrel, that could tip the economy into crisis.

Russia’s steady stream of energy revenue is largely a result of the West’s choices. In 2022, global oil prices soared to over $100 per barrel and U.S. inflation peaked at over nine percent. Washington and its European partners exempted energy from their financial sanctions on Russia out of a fear that disrupting Russia’s crude oil exports would raise global prices and harm their own economies. This fear was also front of mind when the G-7 constructed its oil price cap. Rather than trying to restrict Russian exports, the price cap used a complicated and leaky scheme to try to force Russia’s oil prices lower without reducing its supply to global markets. It relied on Western dominance of shipping insurance and financing to force Russian exporters using those services to sell below the cap. This worked for a few months, but as Russia built up a shadow fleet of tankers that avoided Western services, it was able to skirt the cap.

There is less need for Western restraint today. Inflation in the United States and the eurozone has fallen to nearly two percent, and oil markets are looser: supply growth is outstripping softening global demand, sending prices lower. Oil is trading near $70 per barrel, and the price could drop further still if Trump follows through on his promises to unshackle U.S. energy production. If more aggressive Western sanctions cause Russian crude oil exports to decrease by, say, one million barrels per day—around one-fifth of Russia’s current exports—it wouldn’t spell global economic catastrophe, as it could have in 2022. And given Russia’s low cost of production and desperate need for energy revenue to feed its war machine, Moscow is unlikely to withhold oil exports simply to retaliate against the West.

Russia’s dependence on Western technology for its weapons systems is another important soft spot. According to a January 2024 study by the Yermak-McFaul International Working Group on Russian Sanctions and the KSE Institute at the Kyiv School of Economics, 95 percent of all foreign components found in Russian weapons on the battlefield in Ukraine came from Western countries. Components from U.S.-based companies alone accounted for 72 percent. Restricted goods flow to Russia by way of intermediaries, primarily in China and Hong Kong. With stronger enforcement of Western export controls, Russia would be forced to undertake a costly reorientation of its military supply chains to incorporate inferior Chinese technology and components, causing disruptions and shortages in the supply of weapons to the frontline.

FIRST STEPS

The Biden administration still has time to ramp up the pressure on Russia, starting with steps that target Russian energy revenues. In recent months, more than 90 percent of Russian crude oil exports have been transported to China and India via a shadow fleet of more than 400 tankers. The fleet does not include Western ships or use Western oil spill insurance and therefore is not subjected to the oil price cap. The Treasury Department’s Office of Foreign Assets Control (OFAC) could take this fleet offline by sanctioning individual ships, as it already has with 53 oil tankers. Any entity interacting with a sanctioned ship risks U.S. secondary sanctions, which has proved to be a powerful deterrent. Together, the United States, the United Kingdom, and the European Union have sanctioned 118 tankers, and officials have enough information on the rest to take quick action. Once these measures force more Russian barrels back under the price cap, Western governments can tighten the restrictions even further by lowering the cap from the current $60 per barrel to around $40 per barrel. They can also address rampant attestation fraud by providing whitelisting criteria that would invite legitimate companies, which would be more likely to comply with the cap, back into the Russian oil trade.

The United States and its allies can also move quickly to stanch the flow of Western dual-use goods and machinery into Russia, where they are used to equip the Russian military. Until now, the sanctions coalition refrained from using secondary sanctions to target intermediaries that channel these goods into Russia, allowing evasion networks to grow in Central Asia, East Asia, and the Middle East. That restraint should end. The West should apply sanctions to distributors in countries such as China, Turkey, and the United Arab Emirates—including those that falsely pose as end users of Western products but then sell the goods onward to Iran, North Korea, or Russia.

Export control compliance needs to be strengthened, too. Western technology companies currently conduct minimal checks on their customers and distributors and lack the capabilities to impose rigorous know-your-customer rules similar to those that financial institutions enforce. The Biden administration should take quick regulatory action to raise standards for mandatory corporate due diligence for dual-use technology sales in places such as China, ramp up Commerce Department investigations of export control evasion, and threaten significant fines for violations.

Finally, the Biden administration can do more to ensure that Russia pays for the damage it has done to Ukraine. As part of the July 2024 Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, OFAC now requires that financial institutions report Russian sovereign assets in the United States’ jurisdiction, and the president is obligated to submit a report to Congress on the findings. Publicizing this information might reveal that the United States holds more of these assets than is currently believed, which it could then leverage either as bargaining power with Russia or as aid for Ukraine. Applying these accountability measures would also encourage other Western countries to do the same.

EUROPE’S CARDS

Europe has its own ways to apply economic pressure on Russia, even if Trump decides to go easy on Putin. The EU and the United Kingdom can identify and sanction new Russian shadow tankers on their own, for example, to keep the oil price cap enforced. Europe also has a geographic card to play. Russia’s crude exports from its Baltic coast travel through the Danish straits, and its Black Sea exports through the Strait of Gibraltar. These ships often pass without inspection or adequate oil spill insurance. With sufficient political will and a big enough coalition, coastal countries including Denmark, Spain, and the United Kingdom, potentially with NATO support, could inspect the tankers and check that their insurance meets International Maritime Organization requirements. This would force Russia to use higher-quality Western insurance and tankers for its oil exports, which would be available only if it sold below the price cap.

Russia’s gas sector is vulnerable, as well. The state-controlled energy company Gazprom, once Russia’s crown jewel, posted a staggering $7.3 billion loss in 2023 as it struggled to replace European pipeline exports, which dropped from 154 billion cubic meters in 2021 to 27 billion in 2023. The EU should move to ban Russian liquefied natural gas, which still accounts for 20 percent of its imports. European countries could replace lost supplies with LNG from the United States, which Trump could facilitate by lifting Biden’s limits on U.S. exports—an arrangement Trump should welcome, as it would boost U.S. energy companies.

To keep dual-use goods out of Russia, the EU should establish a centralized agency that would strengthen export control enforcement across member states. It should also use existing mechanisms to curb the sale of critical European industrial goods, such as automated machinery, to third countries. Exports of these goods to countries including Kazakhstan and Turkey have spiked in recent years, suggesting that the sales routes are being used to circumvent sanctions and support Russia’s military-industrial complex.

Finally, the EU can take advantage of the fact that it holds most of the $300 billion in Russian central bank assets that Western countries froze after the 2022 invasion. The EU could confiscate some of these assets and use them to indirectly fund additional U.S. military supplies for Ukraine. Trump could claim credit for securing European payment for U.S. weapons, and the continued flow of essential U.S. military aid could keep Ukraine in the fight.

THE TRUMP FACTOR

The substance and the optics of all these steps should appeal to Trump. Expanding U.S. natural gas exports would help American producers and allow Trump to bag a win in negotiations with Europe. The same goes for securing European purchases of U.S. weapons. Trump would be able to claim success in pressuring Europe to step up its support for Ukraine in a way that Biden did not.

Fortifying U.S. export controls on dual-use technology would also serve Trump’s strategic ends. It would build capabilities that Trump could leverage to curb the shipment of Western military components to other U.S. adversaries such as China and Iran. The Trump administration could expand this effort, too, by providing additional funds to the Commerce Department’s underresourced Bureau of Industry and Security, which administers export controls, and improving that agency’s coordination with OFAC.

Ultimately, cracking down on Russia’s economy and war machine is the most cost-effective way to give Trump what he most wants: a durable deal between Russia and Ukraine for which he can justifiably claim credit. Ramping up economic leverage over Moscow is less risky than dramatically escalating military support to Kyiv, and without additional pressure Russia has no incentive to play ball in 2025. If Trump gets Moscow to accept reasonable armistice terms by squeezing its vulnerable economy, then his election won’t turn out to be the miracle that Putin was hoping for.