Vladimir Dubrovsky, a senior economist at CASE Ukraine, has co-authored a research paper for the prestigious think tank Chatham House, the Royal Institute of International Affairs, on how to increase financial pressure on the Kremlin.
Main idea
Although Russia is one of the most sanctioned countries in the world, the current system of restrictions has failed to significantly undermine its ability to wage war. However, the main ‘weak spot’ of Putin’s regime is its oil export revenues. The authors propose tightening the price cap on Russian crude oil and closing the loopholes that Russia exploits through its ‘shadow fleet’, falsification of insurance documents and irregular trading schemes.
What is not working in the current scheme
Current sanctions are not having a sufficient impact on Russia’s fiscal balance — a key resource for maintaining power.
Export restrictions and the oil embargo have led to a rise in global prices, which has actually boosted the Russian Federation’s revenues.
Russia circumvents restrictions through a ‘shadow fleet’ — old tankers registered in jurisdictions that do not comply with international rules, forged insurance documents, and opaque pricing.
Why target oil ‘rentier’ revenues
Even though oil revenues account for only around 10% of Russia’s GDP, they are crucial for funding elite networks, ensuring loyalty and sustaining the state apparatus.
How to make the price cap effective
The authors propose the following steps:
An automatic and gradual reduction of the price cap in response to new Russian aggressive actions.
Closing loopholes in shipping: restricting ‘shadow fleet’ practices, combating irregular insurance documents, and banning uninsured vessels.
A shift to using CIF (Cost, Insurance, Freight) prices instead of the current FOB model — this will reduce opportunities for manipulation of freight costs.
Strengthening control mechanisms and legal liability — including physical intervention in the activities of fleets that violate the rules.
Leveraging the advantages of European countries — in particular their role in marine reinsurance and control of strategic sea routes (for example, the Baltic Sea, through which up to 60% of Russian maritime oil exports pass).
Political context and challenges
The meeting between Donald Trump and Vladimir Putin in Alaska in August 2025 created uncertainty regarding the future of US sanctions policy.
Even if US support wanes, European countries — thanks to their control over the insurance sector and sea routes — can independently implement a modified price cap.
Conclusion
If the proposed changes are implemented, the oil price cap will not merely be a restriction, but a strategic tool for reducing the Kremlin’s resources. It is an opportunity to undermine the regime’s financial base without risk to the global oil market.