Russia: A case study for sanctions not working as planned
An employee and a visitor walk by Mercedes-Benz cars at an auto dealership in Moscow, Dec. 19, 2025.
Ramil Sitdikov/Reuters
Moscow
There are about 30 million foreign-branded cars on Russian roads, most of Western make. Dmitry Gorelov, who owns an automobile service center in Moscow, boasts that he can repair any of them.
It鈥檚 people such as him that kept the auto market in Russia stable after the start of Moscow鈥檚 full-scale invasion of Ukraine, when Western car companies pulled out, shredding the warranties of Russian car owners and making it impossible to obtain producer-certified spare parts.
鈥淲e used to get spare parts from the manufacturer or its designated provider,鈥� Mr. Gorelov says. 鈥淣ow, we get the same parts from China鈥� or from a number of Russian companies that have sprung up to fill the gap by illicitly making replacement parts. 鈥淲e can get anything we need.鈥�
Why We Wrote This
Sanctions are one of Western governments' favorite foreign-policy weapons in recent years, as we reported earlier. But their use does not always result in the infliction of economic pain that is intended. Sometimes, their effects can be wholly unexpected 鈥� and counterproductive.
That helps to explain why, more than four years after Western suppliers cut them off, millions of Russian drivers are still tooling around in American, European, and Japanese-made cars. It also hints at how Russian airlines continue flying their estimated 500 or so Boeing and Airbus planes, and how Russian energy producers manage to keep exploring and drilling for oil and gas.
When Western leaders levied what has been described as the most intense sanctions regime in history against Russia, starting in 2014 and intensifying after the invasion of Ukraine in 2022, they expected big effects. Results like economic sectors that were dependent on Western expertise being forced to shut down, or at least to revert to more primitive forms of activity.
Instead, the Russian economy rewired itself, developed alternatives for many of the Western goods it was suddenly deprived of, and in many cases, found illegal ways of acquiring them. It rerouted supply chains and courted new markets.
Where 15 years ago, Russia鈥檚 biggest trading partner was the European Union, which bought Russian energy and sold back the full range of consumer goods, today, new pipelines carry Russian oil and gas to China. Instead of the empty shop shelves that many predicted, the same range of goods is available but are now mostly homemade substitutes, or from countries that refused to join the sanctions regime, mostly in Asia.
Even if the war in Ukraine ended tomorrow, the changes wrought by sanctions on the configuration of Russia鈥檚 economy, its relations with other countries, and, arguably, the shape of the global economic order look permanent.
鈥淪anctions do have an impact; they damage and distort normal market relations,鈥� says Ivan Timofeev, director of the Russian International Affairs Council, a government-founded diplomatic think tank in Moscow. 鈥淣o one denies that it鈥檚 very stressful, but Russia has largely adapted. By redirecting trade and reshaping domestic economic relations, we鈥檝e survived.鈥�
Diversification, thanks to sanctions
After growing robustly in the early years of the war, thanks to massive state military spending, Russia鈥檚 economy has begun slowing down. Still, the International Monetary Fund predicts it will grow by 1.1% this year, which, ironically, is more than is forecast for major nations that are sanctioning Russia, including France, Germany, and the United Kingdom.
The structural economic changes wrought by war and sanctions have been sweeping, but the political shift may prove equally durable. Russia鈥檚 foreign policy priority in the first decade of Vladimir Putin鈥檚 reign was to improve relations with Europe. In recent years, China has become Moscow鈥檚 key geopolitical partner, and it has poured resources into building alternative Russia-friendly associations of states such as the BRICS.
鈥淩ussia does not view sanctions as some sort of punishment for our supposed sins. We perceive sanctions as economic warfare waged against us with the purpose of destruction,鈥� says Dmitry Suslov, an expert with the Higher School of Economics in Moscow. 鈥淩ussia has come to view the West not merely as unreliable partners, but as adversaries bent on destroying us.鈥�
The impact of sanctions has produced portentous surprises, such as Russia鈥檚 massive trade surplus with longtime partner India 鈥� about $60 billion last year 鈥� which has the potential to reshape Indo-Russian relations permanently. India鈥檚 currency controls make it difficult for Russian companies to repatriate their profits, so talks are underway to find mechanisms to either increase Indian exports to Russia or allow Russia to invest its growing stack of rupees into India.
鈥淲e鈥檝e never had trade with Russia like we have today,鈥� says Nandan Unnikrishnan, an expert with the Observer Research Foundation, a Delhi-based think tank. 鈥淚t鈥檚 mainly down to oil, but the increase has been exponential.鈥�
Mr. Unnikrishnan says the devil is in the details, but the potential for a deeper Indo-Russian economic partnership is improving.
鈥淚t would be a good thing if the economic relationship became more diversified,鈥� and it might balance Russia鈥檚 drift into China鈥檚 embrace, he says.
Greater Russian and Chinese bonds?
For its part, China has learned to insulate its banks and businesses from the threat of secondary sanctions for doing business with Russia, and the recent blockade of the Strait of Hormuz appears to have focused Chinese minds on the benefits of building new energy pipelines from Russia that avoid such maritime choke points.
鈥淐hina is largely self-sufficient in energy, but they鈥檝e made it clear that they are ready to absorb as much oil and gas as Russia can supply,鈥� says Sergey Sazonov, an expert with the official Institute of China and Contemporary Asia in Moscow.
The U.S.-led war in Iran appears to have accelerated many developments that were already underway, which will make the world a more comfortable place for Russia. That includes diversification of trading partners and efforts to establish payment systems that avoid the use of the dollar.
鈥淭he public discussion in India [since the Iran war started] is very clear,鈥� says Mr. Unnikrishnan. 鈥淲e need to reassess our relations with the U.S., and be sure to maintain our good ties with countries like Russia, and not put all our eggs into any one basket. Even if [President Donald] Trump goes, the unreliable nature of the U.S. is likely to remain.鈥�