WASHINGTON DC – The US sanctions machine, once touted as a virtually limitless tool of economic coercion against the Kremlin, may be hitting a wall – or at least that’s the message coming from the top.
Secretary of State Marco Rubio signaled frustration on Wednesday, telling Kyiv Post’s correspondent that the US is nearly “out of options” after slamming Russia’s biggest oil giants, Rosneft and Lukoil, last month.
Speaking to reporters after a meeting of G7 foreign ministers, Rubio lamented: “There’s not a lot left to sanction from our part. I mean, we hit their major oil companies, which is what everybody’s been asking for.”
Sanctions on Rosneft, Lukoil and their web of subsidiaries formally kick in next week, though the carveouts are already piling up.
The measures, which target the primary funding source for Moscow’s war in Ukraine, have already triggered a stream of exemptions – a clear crack in the unified economic front even before the rules fully take hold. Hungary secured a one-year reprieve; others are hinting they’ll ask next.
Rubio argued that the priority now is enforcement – and he pointed squarely at Europe when it comes to cracking down on the Kremlin’s shadow fleet. The EU has sanctioned hundreds of Russia-linked tankers operating in murky waters, ferrying discounted crude to buyers from India to the Gulf.
But that framing – that policing the ghost armada is Europe’s job – doesn’t hold up, according to one of Washington’s leading sanctions analysts.
“There’s quite a bit more the US can sanction”
Rubio’s apparent exhaustion with the sanctions pipeline is sharply contested by sanctions analysts, who see plenty of road left.
Kimberly Donovan, director at the Atlantic Council’s Economic Statecraft Initiative, told Kyiv Post in an interview that the idea the US is running out of targets is simply wrong.
“There’s actually quite a bit more that the US government can sanction when it comes to Russia,” she said.
Donovan argues that the surge in licensing requests to the US Treasury Department – companies scrambling for time to disengage from Rosneft and Lukoil – is a “good signal” the sanctions bite is real. But the real constraint, she adds, isn’t technical capacity.
“It’s political will,” Donovan emphasized, explaining “If these ‘big shots’ are all the administration plans to take, then we need aggressive enforcement and a heavy diplomatic push to make them count.”
Donovan also pointed to several major sectors that Western governments have largely avoided so far.
Chief among them is liquefied natural gas, a cornerstone of Russia’s revenue stream, though she noted that sanctioning LNG could “create other challenges for some different Europeans.”
She added that petrochemicals and additional Russian banks remain potential targets.
Another priority, she said, is tightening coordination by bringing US designations in line with the 19 sanctions packages already imposed by European partners.
Shadow fleet: US points to Europe, analyst points back
Rubio cast the crackdown on the shadow fleet – the hundreds of tankers operating off-radar, often over-aged, uninsured, and increasingly dangerous – as a mainly Europe-led effort. Donovan flatly disagrees.
“This was part of the G7’s approach from the beginning,” she said, adding, “Going after those who violated the price cap was a multilateral effort – not a European hobbyhorse.”
And the US, Donovan stressed, has every reason to get back into the ring. The shadow fleet isn’t just a Russia problem: Iran uses the same tactics, Venezuela too. A coordinated G7 crackdown could simultaneously squeeze all three adversaries.
Canada recently proposed a multinational task force to unify intelligence-sharing and enforcement – an idea Donovan supports, but Washington reportedly balked at.
“I agree with the Canadians,” she said. “A task force makes sense. And it should be expanded – Russia, Iran, Venezuela – the entire ecosystem of illicit oil shippers.”
Beyond sanctions, she says the G7 and UN could take a more systemic approach: maritime safety standards, documentation digitization, and environmental accountability.
Because the stakes aren’t only geopolitical.
“The shadow fleet is a climate disaster waiting to happen,” Donovan warned. “We’ve already seen tanker groundings in the Black Sea. There are UN mechanisms to hold Russia and Iran accountable for these practices.”
Sanctions gap Russia can exploit
Europe has now passed 19 rounds of Russia sanctions – hitting LNG, crypto, Russian banks, shadow-fleet vessels, and more. The US has taken fewer swings, often slower and more selectively.
When asked how important it is for Washington to align fully with the EU sanctions regime, Donovan doesn’t mince words.
“When the UK, EU and US align, sanctions have a much broader effect,” she said. “When they don’t, rogue actors exploit the gaps – jurisdictional arbitrage – and the money keeps flowing.”
The US, she notes, still has the world’s most powerful sanctions lever: the dollar. But power doesn’t matter if Washington isn’t using it in sync with its closest allies.
Beyond the sanctions list
The key takeaway for analysts is that the next phase of the pressure campaign is less about identifying new targets and more about enforcement and creative alignment.
Donovan advocates for a multi-pronged attack beyond traditional financial sanctions, including leveraging maritime law and even the UN to counter the fleet, which she ominously warns is an “environmental crisis waiting to happen.”
She also argues Washington could target ports that continue to allow sanctioned shadow-fleet vessels to dock. This kind of “creative” escalation is what’s needed, she said.
The ultimate effectiveness of the sanctions hinges on a tightly aligned front. “When sanctions don’t align, traditionally, that’s where illicit and adversarial actors will find ways to take advantage of that jurisdictional arbitrage and differences to continue to move money,” Donovan explained.
The latest big-shot sanctions on Russian oil are generating the desired market chaos and compliance demands. But the US is sending a mixed signal by claiming to be out of bullets while key targets remain on the board.
The success of the current squeeze – and the prospects for compelling Russia to the negotiating table – now ride on the White House’s appetite for heavy enforcement and a willingness to fully coordinate with European partners, a test of political resolve that Washington seems reluctant to fully embrace.
Rubio’s claim that the sanctions cupboard is nearly bare underscores a growing disconnect inside the G7. The US administration says the focus is shifting from designing new hits to enforcing existing ones. Europe, Canada, and sanctions experts say the toolbox is still full – and that Washington is leaving critical targets untouched.
The next test comes November 21, when the Rosneft and Lukoil measures take full effect – and when the White House will need to decide whether this phase of the sanctions campaign ends with last month’s salvo or enters a far more aggressive second phase.