Shortly thereafter, Saudi Arabia’s minister of finance approved the kingdom’s 2026 borrowing plan, projecting total financing needs of $57.9 billion. The proceeds are intended to fund a projected fiscal deficit of $44 billion, equivalent to 3.3 percent of Saudi Arabia’s gross domestic product (GDP).

This financing was highly successful, but as detailed in this report, the markets do not price Saudi Arabia as AA credit. In fact, Saudi Arabia trades at a discount to single A-rated sovereign debt, suggesting that the kingdom has work to do to build confidence in the country’s ambitious economic transformation plans, while showing the marketplace that this nation has the ability to generate accretive value generating returns.

Notably, while the Saudi Ministry of Finance constructed the 2026 budget on assumptions of slowing aggregate global demand for crude oil, the revenue outlook embedded in the projections implies a more constructive view on oil prices. As detailed in the table below, oil revenue, captured within “Other Revenue,” is budgeted at 64 percent of total revenue in 2026, unchanged from 2025. This suggests that hydrocarbons remain the dominant fiscal pillar, even as diversification accelerates. 

By contrast, Goldman Sachs, in a December 2025 report titled “Saudi Arabia: FY2026 Budget Targets Significant Consolidation,” takes a more skeptical view of the kingdom’s fiscal outlook, driven largely by oil revenue assumptions. Goldman estimates a budget deficit of 6 percent of GDP, compared with the government’s projection of 3.3 percent, implying that Saudi Arabia may ultimately need to borrow additional capital to finance its growth ambitions.

Saudi Arabia’s widening fiscal deficit, alongside a growing current account deficit, reflects an economy firmly in investment-led growth mode. This is simply a function of a government that is spending more on expenditures than revenues, the definition of an expansionary fiscal policy. In addition, a widening current account deficit is by definition an economy investing more than it has in savings. Taken together, this showcases the government’s commitment to funding growth. Sustaining this trajectory will require continued access to both domestic and external financing markets. During the first week of January, the kingdom demonstrated precisely that access by issuing $11.5 billion of senior unsecured bonds, drawing reported demand in excess of $20 billion from global fixed-income investors, particularly for longer-duration tranches.

The transaction underscored Saudi Arabia’s strong market standing, supported by moderate debt levels, manageable debt-service ratios, and substantial foreign reserve buffers. In addition, Saudi Aramco’s partial public listing has created an additional channel through which the state can access and monetize future oil cash flows, enhancing fiscal flexibility alongside sovereign borrowing. Assuming borrowing remains aligned with economic growth and fiscal discipline, access to capital markets should remain durable.

The diversification of the Saudi economy over the past decade has been significant. Non-oil GDP has risen from approximately 56 percent of total GDP in 2016 to roughly 65 percent in 2026, according to data compiled by the Saudi General Authority for Statistics and International Monetary Fund estimates. Nonetheless, oil revenues remain the primary fiscal driver, and any assessment of Saudi Arabia’s budget outlook is incomplete without considering global energy market dynamics.

In its Global Energy Perspective 2025, McKinsey & Company notes that while fossil fuels are likely to retain a meaningful share of the global energy mix beyond 2050, demand is expected to plateau between 2030 and 2035.

Neal Shear, founder of Morgan Stanley’s commodities platform and former global head of sales and trading, observes that “it is hard to accurately predict peak global demand for energy.”

“However, it is much easier to come to a consensus that the secular trend line for fossil fuel demand is downward over the next decade,” he told me.

Shear further argues that today’s crude oil market is increasingly demand-driven rather than supply-driven, rendering global supply dynamics closer to a zero-sum game. Incremental barrels from countries such as Venezuela may displace production elsewhere, rather than expand overall consumption. Over time, absent commensurate supply discipline, a downward-shifting demand curve implies secular downward pressure on prices.

The year 2026 marks the tenth anniversary of Vision 2030, Saudi Arabia’s ambitious economic transformation strategy. The program’s core objective of diversification away from hydrocarbons into sectors such as petrochemicals, tourism and hospitality, mining, healthcare, manufacturing, retail, construction, and finance has materially reshaped the kingdom’s economic landscape over the last decade.

Looking ahead, policymakers could further strengthen market confidence in two key areas. First, financial markets and more broadly investors would welcome greater fiscal transparency, particularly a clearer breakdown of oil-related revenue assumptions and the treatment of Saudi Aramco dividends within the budget framework. As it stands, the Saudi budget does not delineate this dividend in full, so it is not readily transparent to investors how much of the budget is being driven by oil revenues. Second, as investment scales, there should be a stronger emphasis on capital efficiency and risk-adjusted returns. Transparency around outcomes, including those that underperform, would likely enhance, rather than diminish, investor confidence.

The chart below shows that Saudi sovereign bonds trade at wider spreads than those of AA-rated peers, consistent with the kingdom’s split credit ratings. More notable, however, is that spreads also exceed those of single-A sovereign benchmarks, suggesting that markets continue to apply a degree of caution beyond what headline ratings alone would imply. Part of this reflects technical factors, including index inclusion, but it also points to a broader question of confidence as Saudi Arabia advances its Vision 2030 agenda. As the scale of public investment rises, sustained fiscal transparency, clearer articulation of oil-revenue assumptions, and demonstrable capital efficiency will be critical in translating economic transformation into tighter sovereign risk premiums.

Source: Vaneck, JPM Indices (Saudi Arabia Sovereign Spread JPGCSASS Index, EMBIGD A Spread JPSSGDCA Index, EMBIGD AA Spread JPSSGDAA Index)

Markets do not demand perfection; they value clarity, discipline, and resilience. Saudi Arabia’s long-term strategy is coherent, ambitious, and increasingly credible. If executed with continued transparency and fiscal prudence, it has the potential not only to transform the kingdom but to reshape the broader region. The US debt capital markets, for now, appear to agree.

Khalid Azim is the director of the MENA Futures Lab at the Atlantic Council’s Rafik Hariri Center for the Middle East.

The post Why US markets are betting on Saudi Arabia  appeared first on Atlantic Council.

Fourteen years after the 2011 uprising and NATO-led military intervention that toppled Muammar Gaddafi, Libya remains divided. While the internationally recognized Government of National Unity (GNU) rules the northwest, the Libyan National Army (LNA), led by military leader Khalifa Haftar, controls most of eastern Libya—with both factions backed by competing foreign militaries.

For years, the situation on the ground seemed frozen. Yet two recent developments mark a shift: Oil majors are returning to the country, and the United States is stepping up its military engagement. The visits by the top leadership from US Africa Command (AFRICOM) in October and December last year and the announcement that Libya will join Exercise Flintlock—AFRICOM’s largest annual special operations exercise historically focused on West Africa—signal that the US administration now views Libya’s trajectory as inseparable from broader regional stability.

Against this backdrop, the United States has a narrow—but real—opportunity to reset conditions in Libya by combining carefully calibrated security engagement with strategic investment. Taking this opportunity is urgent, especially as Russia and other foreign powers seek to cement their influence over the southern Mediterranean’s political future.

Libya’s geostrategic significance for energy, Europe, and the Sahel

Libya straddles Europe and Africa. While its coastline faces Italy, its southern expanse feeds directly into the Sahel, where al-Qaeda-aligned groups such as Jama’a Nusrat ul-Islam wa al-Muslimin and Islamic State (IS) affiliates operate. What happens in Libya affects US and European energy security, regional counterterrorism efforts, and global migration flows. Moreover, the country produces between 1.2 and 1.4 million barrels of oil per day and aims to reach two million by 2030. With Western sanctions tightening on Russian energy, Europe increasingly views Libyan crude oil as a pressure-valve alternative.

In November, Shell, Chevron, Eni, TotalEnergies, and Repsol* were all pre-qualified to participate in Tripoli’s first exploration auction in eighteen years. However, instability in southern Libya continues to amplify extremist mobility and arms flows from the Sahel, directly threatening these investments. That risk is further compounded by the expansion of Russia’s Africa Corps—the successor to the paramilitary Wagner Group—in the east and south. Meanwhile, the Central Mediterranean migration route remains a sensitive domestic political issue for Italy. Rome’s Mattei Plan is explicitly built around stabilizing Libya’s energy production and migration management.

Navigating fragmentation and proxy competition to unlock investment

Progress in Libya’s hydrocarbons sector remains contingent on a minimum threshold of stability and predictability in governance, which is still fractured between the Tripoli-based GNU—backed by Turkey and Qatar—and Haftar’s LNA in the east, supported by Russia (via the Africa Corps), Egypt, and the United Arab Emirates.

The signing of a 2019 maritime boundary treaty with the GNU has given Turkey de facto veto power over Libya’s western security sector and offshore zones. Meanwhile, Russia has entrenched itself in eastern Haftar-controlled areas since 2023. Instead of relying on the Wagner Group, however, Moscow has transitioned to formal involvement via the Ministry of Defense. Russia now controls airbases, logistics hubs, and key desert routes into the Sahel, with personnel positioned near critical oil fields and terminals—the same assets the Tripoli government is attempting to license to Western firms.

The result is that Libya has become the Mediterranean’s most active proxy chessboard, with foreign powers positioning themselves to capture future revenues from hydrocarbons and reconstruction. Absent a credible US counterweight, decisions on energy access, migration management, and political transition will be made in Moscow or elsewhere—but not in Washington or Brussels.

A new window for US reengagement

Two developments suggest a modest but meaningful upward trend in US reengagement. First, building on the US Navy ship visit to Libya in April (the first in fifty years), AFRICOM’s deputy commander visited GNU-controlled Tripoli and LNA-held Sirte in October. Inviting Libya to Exercise Flintlock was deliberate signaling: The US government seeks to pull Libya into a broader Western security network—rather than cede the field to other countries with stronger influence, such as Russia. This trajectory continued in early December, when Prime Minister Abdul Hamid Dbeibah met AFRICOM’s commander to expand cooperation on training, equipment, and force professionalization. The GNU’s public request for deeper US support in professionalizing Libya’s security forces marks a notable shift after years of strategic hedging between Washington, Ankara, and Doha.

Second, there has been a surge of activity around Libya’s energy sector. Since 2023, oil output has stabilized, front lines have frozen, and neither the LNA nor the GNU has achieved decisive military or political dominance. This stalemate has created political space for external influence. Energy-sector momentum has been reinforced by high-level diplomatic traffic in both directions. The US special envoy for Africa and Arab Affairs, Massad Boulos, traveled to Tripoli and Benghazi in July, followed by a GNU delegation visit to Washington in August. That trip signaled the GNU’s intent to re-anchor Libya with Western stakeholders and request US assistance in pushing Russia out of eastern military bases to restore unified territorial control.

That momentum was further reinforced by a joint statement on November 26 from the United States, major European partners, Gulf states, Turkey, Egypt, and the United Kingdom. The statement backed a renewed mandate for the United Nations Support Mission in Libya (UNSMIL), endorsed a political roadmap by UNSMIL head Hanna Tetteh, and explicitly called for deeper east-west military and economic coordination—a rare moment of alignment among Libya’s external powerbrokers. For the US administration, this sent the strategic signal that Libya’s unification is now within reach. The window of opportunity, however, is closing fast—and another conflict cycle, election breakdown, or foreign miscalculation could shut it indefinitely.

The energy-security nexus: Why investment alone will fail

The return of oil majors represents the most consequential shift in Libya in a decade. But investment without security is unlikely to endure. In March last year, Libya launched its first licensing round for oil exploration in eighteen years, signaling a bid to attract Western technology, capital, and expertise. Shell, BP*, TotalEnergies, and Eni have reopened channels with the National Oil Corporation (NOC)—and ExxonMobil* signed a memorandum of understanding in August for offshore exploration in the Sirte Basin.

Yet these developments do not change the fact that some of Libya’s most valuable reserves remain under Russian influence. Western firms cannot scale operations without predictable access, enforceable contracts, and baseline security guarantees.

An intentional presence to protect investment

To consolidate recent political and economic gains—and protect sizable Western energy investments—the United States should deliberately expand its diplomatic, military, and economic presence in Libya, in close coordination with allies.

The March 2024 announcement that the United States will reopen an embassy in Libya is a critical step toward sustained engagement across military and economic channels. It will also enable closer coordination with key partners—including Italy, Egypt, Turkey, and the UN—whose objectives overlap with US interests.

As the multi-year process to open the embassy inches forward, AFRICOM and its components should pursue near-term, high-impact initiatives. US special operations forces should help build and professionalize vetted Libyan special forces units across both western and eastern factions, units that would pursue shared security interests, no matter the progress toward an eventually possible unification. Additionally, maritime partnerships should be expanded rapidly to strengthen Libyan Navy and Coast Guard capabilities, particularly in interdiction, offshore asset protection, and port security. At the same time, the United States could leverage its convening power to establish a technical deconfliction cell in Sirte, allowing GNU and LNA representatives to coordinate security around oil infrastructure and prevent escalation. Such mechanisms could also support counterterrorism cooperation, including targeting IS remnants and blocking spillover from the Sahel.

Layered US engagement can unlock stability

However, military engagement alone will not be sustainable without economic development. Given the complex legacy of US involvement—from the economically devastating sanctions of the 1980s to the 2011 NATO intervention and the overthrow of the Muammar Gaddafi regime—the United States must work through partners to advance both economic and counterterrorism objectives. The US International Development Finance Corporation and the Export-Import Bank could prioritize export credits for pipelines, gas processing, and power generation, explicitly linking financing to transparency and anti-corruption benchmarks.

US and partner foreign assistance could also support long-overdue reforms at the NOC, including modern contracting practices, environmental standards, and shared revenue frameworks. These efforts should extend beyond governments: Western energy companies involved in Libya should participate in coordinated infrastructure planning, rather than simply launching isolated investments.

Layering diplomatic, military, and economic tools would allow the United States to establish a modest but coherent posture capable of unlocking outsized stabilization effects—and preventing any country that works against US interests from having dominance over Libya’s future. For the United States, Libya offers a proving ground for a new model of engagement—one built on security assistance that enables Western investment instead of substituting for it. AFRICOM’s renewed presence and the surge of Western energy interest create a rare opportunity to reintegrate Libya into a Western orbit. If the United States seeks stability in the Mediterranean, resilience in the Sahel, and credible alternatives to Russian energy, now is the time to make coordinated security and economic investments in Libya.

Rose Lopez Keravuori is a nonresident senior fellow at the Atlantic Council’s Africa Center, an associate director at Strategia Worldwide, and chair of the board of advisors of GCR Group. She previously served as the director of intelligence at the US Africa Command.

Maureen Farrell is a nonresident senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security and vice president for global partnerships at Valar, a Nairobi-based strategic advisory and risk firm. She previously served as the deputy assistant secretary of defense for African affairs and director for African affairs at the US National Security Council.

Note: Several companies mentioned in this article—Shell, BP, Chevron, Eni, TotalEnergies, Repsol, and ExxonMobil—are donors to the Atlantic Council but not to this article series.

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

Learn more

The GeoStrategy Initiative, housed within the Scowcroft Center for Strategy and Security, leverages strategy development and long-range foresight to serve as the preeminent thought-leader and convener for policy-relevant analysis and solutions to understand a complex and unpredictable world. Through its work, the initiative strives to revitalize, adapt, and defend a rules-based international system in order to foster peace, prosperity, and freedom for decades to come.

learn more

The post The US is reengaging with Libya—and it’s the right call appeared first on Atlantic Council.

He also emphasized that Venezuela can “no longer cozy up to Hezbollah and Iran in our own hemisphere.” 

There are clear implications of the Maduro arrest with respect to US-Iran policy and President Donald Trump’s calculus on strategic action against Washington’s adversaries. The US president has indicated he is weighing “very strong” options on Iran as demonstrations there escalated and the death toll rose sharply over the weekend, according to rights groups.

And as Rubio indicated, the operation could also have a more immediate impact on Tehran’s interests and operations abroad—with Venezuela serving as a foothold for Iran and its proxies in the Western Hemisphere.

Our experts break down Iran’s ties to Venezuela and the impact Maduro’s capture could have on Tehran’s interests both in and outside of Iran’s own borders.

Iran-Venezuela relations: From oil to resistance axis

Venezuela-Iran relations have strengthened in recent years: Both countries are oil producers, both have struggled under a robust Western sanctions regime, and as Tehran upgraded its relationship with Caracas, its proxies, such as Hezbollah, have established themselves inside Venezuela’s borders—creating a strategic foothold in the Western Hemisphere. 

Both countries are founding members of the Organization of the Petroleum Exporting Countries (OPEC) and had an official relationship before the 1979 revolution in Iran that saw the overthrow of the shah. As the Iranian revolution unfolded and the Islamic Republic came to power in Tehran, Venezuela was one of the first countries to recognize the new Iranian government.

This relationship intensified, however, when Maduro’s predecessor, the late Venezuelan leader Hugo Chavez, became president in 1999.

Between 2001 and Chavez’s death from cancer in 2013, Chavez and his Iranian counterparts engaged in dozens of diplomatic visits, and “the two countries signed an estimated three hundred agreements of varying importance and value, ranging from working on low-income housing developments to cement plants and car factories,” according to analysis from the Center for Strategic and International Studies (CSIS). 

Under Chavez, Tehran’s development projects in Venezuela “boosted Chavez’s image and advanced his anti-imperialist agenda throughout the region.” And through Venezuela, Tehran leveraged the partnership to bolster its posture in South America, including in Bolivia and Nicaragua. 

By the tail-end of Chavez’s rule in 2012, Iran’s investments and loans in Venezuela were valued at $15 billion, according to CSIS. 

Beyond oil and diplomatic agreements, gold smuggling has also shaped the relationship model between Tehran and Caracas. Venezuela holds the largest gold reserves in Latin America (just counting Central Bank reserves, and without including geological gold resources, which would place the country in the fifth place for gold reserves worldwide). Additionally, reports indicate that gold has been smuggled to Iran for years as a mode of payment for Iranian assistance to revive Venezuela’s oil sector. 

A base for Hezbollah and the IRGC 

Joze Pelayo, associate director for strategic initiatives and policy at the Atlantic Council’s Scowcroft Middle East Security Initiative, explains

Against this backdrop, Iranian-backed Hezbollah and its affiliates have used Venezuela as a strategic hub in the Western Hemisphere. The country has served as a sanctuary for Hezbollah to evade sanctions, a center for operations and money laundering, and a base for its transnational criminal and drug trafficking network. 

Hezbollah has flourished in key locations in Venezuela—establishing itself within business networks such as Margarita Island and the Paraguaná Peninsula, both with coastal access and a significant Lebanese diaspora community.  

Iran also used the gold market in Venezuela to finance Hezbollah’s operations.  

In 2022, a seizure order signed by former Israeli Defense Minister Gallant and published by the National Bureau for Counter Terror Financing in the Ministry of Defense exposed a smuggling ring involving gold being transported on sanctioned Iranian flights with proceeds directed to Hezbollah.

In addition to all these exchanges, Iran’s Quds Force (the external arm of Iran’s Islamic Revolutionary Guard Corps responsible for asymmetric warfare, cover operations, and intelligence) maintains a robust presence in Venezuela to support Maduro in times of crisis, according to a report from December 2025.  

The hierarchical structure in Venezuela is headed by Ahmad Asadzadeh Goljahi, who oversees operations and heads the “Department 11000,” a Quds Force subunit linked to international terrorist plots, and “Department 840,” involved in overseas assassinations. It is then no surprise that the Iranians attempting to abduct US journalist Masih Alinejad from her home in New York were supposed to make a stop in Venezuela before taking her to Iran.  

Maduro’s capture and the potential realignment of Venezuela with the United States represent a major setback for the Quds Force operations and financing. Such a shift could significantly disrupt the group’s transnational criminal and drug-trafficking networks, oil-smuggling scheme, and other illicit activities tied to Hezbollah and the Islamic Republic of Iran.  

One potential silver lining: Under US custody and influence, Maduro (and possibly Acting President Delcy Rodriguez) could provide critical intelligence as witnesses and cooperators, assisting to expose the extent of these networks, how to properly root out these toxic elements from the country, and key figures the United States could go after next.

A US signal to Tehran 

Kirsten Fontenrose, nonresident senior fellow at the Scowcroft Middle East Security Initiative, explains

The Maduro case is strategically relevant less as a template than as a signal. It suggests a US willingness to act decisively against leaders already criminalized and sanctioned, rather than allowing standoffs to persist on the assumption that the risk of escalation alone will deter action.

The Trump administration framed Maduro’s capture as a law-enforcement arrest rather than a military campaign. The United States did not invoke humanitarian intervention, collective self-defense, or congressional authorization for interstate hostilities. Instead, it relied on longstanding criminal indictments and sanctions authorities. Maduro has been under US indictment since March 26, 2020, for narcotics trafficking and narco-terrorism, and he has been subject to comprehensive Treasury sanctions well before the January 2026 operation. The legal basis for such extraterritorial law-enforcement action rests on domestic authorities rather than the law of armed conflict—a distinction that is controversial but not unprecedented in US practice. 

For Tehran, the relevance is not the legal argument itself but the political signal embedded in its use. Iranian strategic planning has long assumed that US concern about escalation—particularly actions that could be interpreted as leadership targeting—would impose practical limits on Washington’s behavior. The Maduro episode complicates that assumption. It also reinforces a second point: US leverage does not depend exclusively on military operations. In this case, years of sanctions enforcement, financial pressure, indictments, and diplomatic isolation preceded the arrest, demonstrating that decisive outcomes can be pursued through non-military instruments even in high-risk contexts. 

That sequencing intersects with current thinking about the timing of pressure on Iran. Analysis by Rapidan Energy Group Chief Executive Officer Scott Modell published in late 2025 argues that early 2026 presents unusually favorable market conditions for intensified pressure on Iranian oil exports. The analysis points to soft global demand growth, rising non-OPEC supply, spare capacity among OPEC+ producers, and subdued price expectations, suggesting that concerns about oil-price spikes—often a key political constraint on US action—would be less binding in the first quarter of 2026. If that assessment holds, market considerations would be unlikely to restrain US policymakers contemplating additional economic pressure on Iran during this period. 

Trump’s public statements following the Venezuela operation reinforce this interpretation. He framed the action in terms of accountability and deterrence, not regime change or nation-building. His emphasis on speed and decisiveness is consistent with earlier US decisions favoring limited, time-bound uses of force—particularly in counterterrorism and retaliatory contexts—over extended military campaigns. 

This posture aligns with the policy orientation of figures shaping the administration’s approach. Homeland Security Advisor Stephen Miller has emphasized coercive clarity; Special Envoy to the Middle East Steve Witkoff has advocated transactional diplomacy backed by leverage; Vice President JD Vance has expressed skepticism toward open-ended military commitments. Reporting also suggests a US Central Intelligence Agency leadership preference for intelligence-driven, more aggressive collection and disruption posture. 

Recent US actions elsewhere provide additional context. Strikes against Iran-aligned militias in Iraq following attacks on US personnel in 2024, and counter-ISIS airstrikes conducted with host-nation consent in Nigeria in December 2025, illustrate a preference for responding quickly to defined threats without prolonged warning or phased escalation. These cases do not establish a doctrine, but they reinforce the impression of a US approach that favors early, bounded action over incremental response. In this context, Operation Absolute Resolve is meaningful because it unsettles a core assumption within Tehran—that leadership insulation and escalation risk reliably constrain US action. 

The core implication for Iran, then, is strategic rather than operational. The Maduro seizure suggests that the United States is prepared to act decisively against leaders who are already criminally indicted, comprehensively sanctioned, and politically isolated, and that it may do so during periods of internal strain rather than waiting for those pressures to resolve. 

None of this implies imminent leadership targeting in Iran. But it does suggest that Washington is reassessing assumptions about timing, leverage, and leadership vulnerability. 

The post The Venezuela-Iran connection and what Maduro’s capture means for Tehran, explained  appeared first on Atlantic Council.

Bottom lines up front

• A Trump-promised renaissance for Venezuelan oil and gas will be difficult to achieve.
• International oil companies are unlikely to make major new investments in the country without greater legal and regulatory certainty, but it may be possible to modestly raise production through immediate steps.
• Without real change from within, the Venezuelan industry will not be able to support the survival of the current regime or address entrenched humanitarian problems.

Within hours of the astonishing US intervention in Caracas this past weekend that captured Venezuelan strongman Nicolás Maduro, the Trump administration framed it as, among other things, a boon to its US “energy dominance” agenda. Citing Venezuela’s vast hydrocarbon resources—arguably the largest oil reserves in the world—President Donald Trump repeatedly promised that the next phase for Venezuela will involve US energy companies helping to restore the country’s failing oil and gas production, benefiting global oil markets with expanded supply. 

But the pathway from promises to meaningful production increases is likely to be a fraught one. The Trump administration seems to recognize this, as indicated by the administration seizing two oil tankers and quickly announcing an opaque arrangement wherein the United States will acquire thirty-to-fifty million barrels of already available Venezuelan crude oil. These fast wins might help justify the expenditure of US resources to continue its naval blockade and pursue further intervention, as the administration has hinted. But these moves do not fundamentally change the dynamics above or below the ground that have wrecked the Venezuelan industry. Nor do they alter the long path to a major recovery.

Indeed, a Venezuelan oil and gas production renaissance would require, among other factors, meaningful renewed interest and investment from US and international oil companies (IOCs). This will be difficult. As the Venezuelan people look ahead to a murky future and an uncertain US-led transition, leveraging their valuable energy resources to secure the country’s democratic future may prove easier said than done. 

How an industry fell apart

Decades ago, Venezuela’s oil and gas industry was a powerhouse that promised to drive the country forward. The country boasts 17 percent of global oil reserves, with an estimated 303 billion barrels of producible crude oil. In 2000, Venezuelan oil production reached a peak of 3.2 million barrels per day, enabled by joint ventures and effective partnerships between the national oil company Petróleos de Venezuela, SA, or PDVSA, and a host of IOCs.

In the early 2000s, however, the Chávez administration oversaw a nationalization of the Venezuelan oil sector that dramatically changed the terms of engagement for foreign companies. The nationalization resulted in asset seizures, international arbitration, and marked investment decline in Venezuela’s oil-producing regions by most Western companies. Following Chávez’s administration, Maduro and his officials then faced a punishing and ever-accelerating slate of US sanctions. Beginning in 2017, the first Trump administration targeted Venezuela’s oil and gas sector as the primary engine for the Maduro regime’s deepening authoritarianism.

Today, Venezuela’s oil and gas industry is in disarray. Production fluctuates below one million barrels per day, while the wider industry reels from years of underinvestment, neglect, lack of maintenance, and limited access to the engineering and technological prowess of Western IOCs. Improving this situation will require a sea change both for the Venezuelan oil and gas industry and its governing institutions; the former cannot proceed without the latter. By extension, the next steps taken by the country’s remnant Maduro-era leadership, the Trump administration, and the Venezuelan democratic opposition movement are of paramount importance to the future of the country’s energy industry. 

A stable, secure transition

The ideal first step in returning Venezuela’s industry to its former heights would be enabling a democratic transition, leading to a government that would then pass new legislation, revamp supervisory institutions, and operate in accordance with the rule of law. As of now, however, it is unclear that such a transition is the goal of either the Trump administration or Venezuela’s remaining powerbrokers. 

This concern is not a matter of idealism but rather of hard business realities. For any major corporation to engage in a foreign industry, especially in the oil and gas sector, that corporation must know who it is negotiating with. Contract designs and terms can vary considerably, but they must be developed by reliable partners who each understand the other’s roles and responsibilities. After all, a major factor that presaged the decline of Western companies’ engagement with Venezuela (and jump into arbitration proceedings) was Caracas’s reneging on contracts governing how the Venezuelan oil and gas assets were managed in terms of investment and eventual profits. Under the framework in place today, PDVSA has a majority stake in joint ventures. But in its bankrupt condition, it would be impossible for it to meet its capital commitment for nearly any project.

At this stage, it remains unclear who is actually in control of Venezuela and for how long. The Trump administration has indicated, for example, that the United States will remain in control of Venezuelan oil and gas assets for the foreseeable future, perhaps adjusting US licensing and sanctions policy to legitimize US-controlled sales of oil stored in tankers. It’s unclear how willing the Venezuelan regime will be to tolerate this. Moreover, US control is necessarily a short-term strategy. Selling off Venezuela oil stored in tankers and depositing those funds into blocked accounts controlled by the US government will avoid forcing PDVSA to shut in existing production, ensure useful supply to US Gulf Coast refiners, and provide the US government with a significant supply of funds it can manage. But volumes of floating storage are finite, and the Rodríguez government will not remain in power if it seems to be agreeing to sell off the government’s primary source of funds for the sole benefit of the United States or American creditors. 

In addition to legal considerations, the physical risk and security outlook is crucial for any industry that requires intensive on-site, day-to-day operations. These operations must be managed by crews of skilled laborers, geologists, and engineers, to say nothing of the initial construction teams and costly repairs that will be necessary throughout Venezuela’s oil and gas regions. The Trump administration has yet to detail its plan for Venezuela’s transition process apart from the acceptance of Delcy Rodríguez, Maduro’s former vice president, as the acting president. But even as Trump praised Rodríguez on Saturday, he also warned her that a failure to cooperate with a US-led transition could result in another action from US forces. 

Meanwhile, the democratic Venezuelan opposition, led by María Corina Machado, has found its role and potential future influence downplayed, with Trump saying that her movement lacks sufficient legitimacy among the Venezuelan people to be a realistic alternative. Yet another factor is the vast, complex networks of substate and illicit organizations—including violent militias and their overlords—that operate freely throughout Venezuela, have their own assets to protect, and will assuredly have opinions on who should run the country. These same stakeholders—and their foreign allies, who include geostrategic adversaries of the United States—may likewise take a dim view of the acting president’s apparent complicity in passing Venezuelan crude oil along to the United States if there are not immediate, tangible benefits for doing so outside of the remnant regime’s top brass. 

Any rational business leadership would think carefully before committing itself to new investment under these conditions. For a genuine oil sector renaissance to commence, the Venezuelan government must prove that it possesses stability, legitimacy, and resilience. US promises that a conciliatory administration in Caracas (for now) can ensure these conditions will be met with justified skepticism. 

Attracting private investment

Regulatory and financial certainty are essential factors for major international oil businesses when making significant investment decisions. This is especially true when oil and gas prices are already soft, at around sixty dollars per barrel, and most outlooks predict a global oversupply throughout the coming year. In other words, for Venezuelan oil and gas investment to make fiscal sense, IOCs will require a return on investment in a reasonable timeframe. Moreover, such businesses will need reasons to believe that long-term engagement (possibly thirty years or longer) in the country will ultimately be profitable based on global oil and gas market outlooks for the next decade or more. 

The United States removing or making major adjustments to existing sanctions on Venezuela will be crucial to expanding oil production over the short run, as well as attracting new large scale private investment to the country. At present, both the Venezuelan government and its oil and gas sector (principally PDVSA) face a punishing tranche of US sanctions that have cut them off from money, credit access, partnerships, and technology essential to running the country’s oil and gas industry. As of now, any transactions between Venezuelan entities and any foreign company are subject to US restrictions, US Treasury sanctions designations, and lost access to the US financial system. This state of affairs makes the immediate reentrance of US or other Western companies impossible.

Ideally, IOCs would like to see a scenario where most sanctions are lifted or significantly eased, along with reassurance that a reversal would not occur anytime soon. In addition, they are looking for a revamped Venezuelan regulatory framework for its energy sector, including changes to regulations governing operations, trading and exports, terms for joint ventures, asset ownership, and legal rights. Lastly, the Trump administration has hinted at measures that would enable the repayment of companies that previously exited the country in compensation for their prior losses.

A revamped licensing process that allows existing investors to expand their operations could potentially lift production by 300,000 barrels a day over the course of a year, industry experts have suggested. Allowing smaller companies to invest in production sharing, including through productive participation contracts, could likewise incentivize participation. These adjustments could enable another 200,000 to 300,000 barrels a day in new production over the course of the next twelve to eighteen months, the industry experts estimate. Funds from that production could go into a blocked account, which would realistically need to be dedicated to humanitarian benefits in Venezuela, with perhaps a share reserved for repayment of US creditors. 

For now, the Trump administration has not signaled that a major softening of the existing sanctions slate is imminent and the oil blockade remains in place. The Rodríguez leadership likewise has not signaled that a reshaping of its oil and gas regulatory framework is incoming at the behest of the United States or anyone else. Instead, the administration’s new plan for selling up to fifty million barrels of Venezuelan crude oil suggests that its focus is on growing near-term, low-hanging fruit production opportunities to prevent the industry from total collapse and shut-in of its existing production.

A positive financial and investment signal might encourage buy-in and engagement from IOCs and smaller companies. One means of doing so would be creating a new escrow account, under US control but presumably with some percentage of profits reverting back to the Venezuelan government. Such a fund could serve as the deposit site for new oil and gas profits over the near-term, ahead of a full lifting of sanctions and/or successful national elections in the future. This account could be enacted through adjustments to the existing sanctions slate, and it could provide a vehicle for early seed funds to be fed into any new Venezuelan governing institutions as a revamped regulatory design is developed. Optimistically, this fund could also serve as a test run for a new sovereign wealth fund, which could help prevent a reversion to the illegitimate use of Venezuela’s resource wealth that had been a hallmark of the Maduro regime.

For now, the Trump administration is hoping that it can deliver a strong enough signal to private oil and gas companies that there can be some compensation and long-term gains to reengagement with Venezuela, if only to enable immediate, easy repairs and infrastructure salvaging. The attractiveness of that offer, and its long-term durability and legality, are yet to be seen. 

However, much more political and regulatory change will be necessary to revive the Venezuelan energy industry. Such changes will be far more difficult to achieve than handshake deals to split revenues for a handful of oil sales; moreover, these modest steps forward are far from sufficient to address the depth of the political challenges ahead. Lifting production in the neighborhood of half-a-million barrels per day might preserve what is left of Venezuelan production capacity, but it will not be enough to keep Maduro’s remnant leadership stable or meet the population’s profound humanitarian and economic needs. As a result, the entrenched challenges of migration, drug and other illicit trafficking, intensified substate violence, and perhaps de facto Balkanization of the country by various strongmen (and their domestic or foreign backers) remain palpable risks. The Trump administration, focused on resource management in Venezuela, has so far shown little interest in resolving these issues. But they will not go away, and they could derail the administration’s vision for a more stable energy industry and country.

The post What it takes to revive Venezuela’s oil and gas industry appeared first on Atlantic Council.

On January 7, Atlantic Council vice president and Scowcroft Center senior director Matthew Kroenig was interviewed on DW News about the US seizure of a Russian flagged oil tanker carrying Venezuelan oil. He contends that the move signaled US resolve in quarantining the Venezuelan regime and adopting a firmer approach toward Russia in the Western hemisphere.

Staff

Matthew Kroenig

Vice President and Senior Director, Scowcroft Center for Strategy and Security

Scowcroft Center for Strategy and Security

China Defense Policy

The post Kroenig on DW News on US oil tanker seizures in the Caribbean appeared first on Atlantic Council.

Bottom lines up front

• Venezuelan oil supply is unlikely to meaningfully move global energy markets in the near term.
• Oil may help pay the costs of US intervention in Venezuela, but Trump is likely more motivated by securing the Western Hemisphere.
• The operation to remove Maduro signals Trump will take action when it advances US interests but does not burden the American public.

Based on how prominently Venezuela’s vast oil reserves featured in President Donald Trump’s Saturday press conference about the military strike that captured Nicolás Maduro, oil does appear to have played an important role in shaping the administration’s will to advance the audacious mission. Yet it would be misguided to claim that gaining access to supplies of heavy crude oil was the impetus for the operation.

Venezuelan oil supply is unlikely to move global energy markets meaningfully in the near term. For now, the country remains under an oil embargo imposed by the Trump administration. Even under optimistic assumptions, it will take years to rehabilitate the country’s energy sector and achieve a sizable increase in oil exports. Saturday’s operation didn’t hinge on nuanced assessments of crude grades or the US refining sector’s appetite for heavy supply. Energy was the enabler of a much bolder manifestation of Trump’s foreign policy as laid out in the administration’s recently released National Security Strategy. 

The United States is now practicing an enhanced version of the two-hundred-year-old Monroe Doctrine. What Trump described Saturday as the “Donroe” doctrine seeks a Western Hemisphere free from hostile external influence and aligned with US political and economic interests. This makes political realignment in Latin America relevant to the president’s vision for the region. Trump also is likely keen on aligning his removal of Maduro and approach to Venezuela with US domestic interests. That includes not saddling American taxpayers with the price tag of another conflict, as well as stemming the recent high levels of migration to the United States from Venezuela. It also includes reducing the violence caused by cartels trafficking illegal narcotics and making whole US companies whose assets Venezuela expropriated under Maduro’s predecessor Hugo Chávez. Here, oil is the enabler that may help pay for the execution of the policy, not the ultimate prize. 

In his address from Florida on Saturday, Trump correctly sized up the state of Venezuela’s oil economy: For a country with the largest oil reserves in the world, production is a “total bust” and the full potential of those assets has not been realized. Under Maduro’s rule, production declined from around 2.5 million barrels per day to less than one million barrels a day. If there is an orderly transition of power in Venezuela, then US companies will benefit from the political transformation. 

At the same time, the United States is the world’s number one oil and gas producer. It is energy secure. This explains why Trump emphasized that revitalizing Venezuela’s oil patch will make the people of Venezuela—not the United States—“rich, independent, and safe.” Consider the example of neighboring Guyana, where the public is benefiting from oil extraction by US companies. Ensuring Venezuela stands strong alongside the United States will help achieve the president’s domestic policy goals and lessen the influence of Russia, China, and Iran in the Western Hemisphere, all while avoiding economic costs to the American public. 

The policy that the Trump administration pursued on Saturday offers insight into the president’s decision-making and the impulses driving his administration. For those countries at odds with the United States, it’s a clear signal that Trump will take decisive action when US interests can be advanced without burdening the American public.

The post Venezuelan oil was the enabler, not the prize appeared first on Atlantic Council.

Nicolás Maduro is out. But who’s in? Early on Saturday morning, the US military removed the Venezuelan strongman from power, transporting him to New York to face narcoterrorism charges. President Donald Trump said the United States will now “run” Venezuela and that Maduro’s former vice president, Delcy Rodríguez, has assumed the presidency for now. What does it all mean for the United States, the Venezuelan people, and the country’s oil? Our experts have the preliminary answers.

• Jason Marczak (@jmarczak): Vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center 
• Iria Puyosa (@NSC): Senior research fellow at the Atlantic Council’s Democracy+Tech Initiative and a native of Venezuela 
• Alexander B. Gray (@AlexGrayForOK): Nonresident senior fellow with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security, and former deputy assistant to the president and chief of staff of the White House National Security Council 
• David Goldwyn (@Dlgoldwyn): Chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group and former US State Department special envoy and coordinator for international energy affairs 

Changing the regime

• “This is the most consequential moment in recent Venezuelan history—and for the broader Latin American region,” Jason tells us. “This operation goes beyond a simple extradition: It is a regime-change effort.” 
• For now, Rodríguez—who was very much a part of the Maduro regime—is in power, though she “does not appear to have the backing of all factions within the ruling party,” Iria notes.  
• “Rodríguez cannot guarantee the stability required for” the Venezuelan economic revival that Trump is calling for, Iria adds. “Chavismo no longer enjoys the widespread popular support it had two decades ago.” 
• Jason points out that Rodríguez is constitutionally obligated to call new elections within thirty days, but even that step would in effect come from the same regime that stole an election rightfully won by the opposition in 2024. Trump called for a “safe and judicious transition,” but Jason notes that “many entrenched actors are likely to resist meaningful change,” even though “real change is fundamental to US interests and to the Venezuelan people.” 

Sign up to receive rapid insight in your inbox from Atlantic Council experts on global events as they unfold.

The Trump Corollary

• Trump’s 2025 National Security Strategy outlined a “Trump Corollary” to the Monroe Doctrine, with a focus on securing the Western Hemisphere. This operation tells us the Trump Corollary “is officially in effect,” Alex says. “Washington has demonstrated a long-overdue commitment to hemispheric security.” 
• And US adversaries are watching. The operation “will be seen in Beijing and Moscow as an unambiguous sign of the Trump administration’s commitment to a security order compatible with American interests,” Alex explains. 
• The operation, Alex adds, “creates a once-in-a-generation opportunity for Washington to translate its security preferences into strategic reality” by “ensuring extra-hemispheric powers like China and Russia are excluded from meaningful influence in Caracas.” 
• Trump also sent a message to other leaders in the region. “Trump mentioned Colombia and Cuba as countries whose leaders should now know the consequences of not cooperating with the United States,” Jason points out. 

Oil outcomes

• Trump spoke of bringing back US oil companies that were booted out by Venezuela’s 1976 nationalization of the oil industry. But “few US companies are likely to return to the country until there is a reliable legal and fiscal regime and stable security situation,” David tells us. “Companies that have existing operations are much more likely to revive and expand them if the environment is secure.” 
• The United States has plenty of policy options at its disposal, David says. For example, the administration “could allow oil currently on tankers to be exported, expand licensing, and permit Venezuela to sell oil at market prices, all for the purpose of maximizing national revenue.” 
• But, David adds, “until there is clarity on sanctions and licensing and more information on who is actually managing the central bank and ministry of finance, the prospects for Venezuelan oil production and exports will remain uncertain.” 

The post What to watch in a post-Maduro Venezuela appeared first on Atlantic Council.

So, what’s next for Maduro, Venezuelans, and US efforts in the region? Below, Atlantic Council experts share their insights.

Click to jump to an expert analysis:

Jason Marczak: The US needs to remain committed to a democratic transition

Matthew Kroenig: A win for regional security, the Venezuelan people, and the US military

Alexander B. Gray: This operation sends a signal to Beijing and Moscow

David Goldwyn: Opening up Venezuela’s energy industry will come down to the details 

Celeste Kmiotek: The US strikes most likely fall afoul of international law

Iria Puyosa: Delcy Rodríguez cannot guarantee the stability Trump wants

Geoff Ramsey: The mission is not accomplished until Venezuelans get free and fair elections

Nizar El Fakih: Multilateralism failed Venezuela. But it failed long before today.

Tressa Guenov: Success will require years-long US diplomatic and economic efforts in Venezuela

Kirsten Fontenrose: Watching Venezuela from Tehran

Thomas S. Warrick: Maduro’s ouster will cause shock waves in the Middle East

Alex Plitsas: Three scenarios for what could come next 

The US needs to remain committed to a democratic transition 

Many Venezuelans are hopeful that today marks the beginning of a new era. The removal of Nicolás Maduro from power is a reality that Venezuelans in the country and the nearly eight million forced to flee under his regime have long sought.

Here are three key takeaways from the operation:

First, this is the most consequential moment in recent Venezuelan history—and for the broader Latin American region. Trump’s Saturday announcement made it clear that this operation goes beyond a simple extradition: It is a regime-change effort. Maduro is now en route to New York City to face criminal charges, but the United States intends to “run the country” until “a safe and judicious transition” takes place. That means Delcy Rodríguez, Maduro’s vice president, cannot simply take power and continue his policies. In assuming the presidency, she is constitutionally obligated to hold elections within thirty days. But remember, there was a prior election in July 2024 which opposition leader Edmundo González won, according to released vote tallies.

Second, the US military operation is the start—not the end—of a new level of direct US engagement in Venezuela. Trump confirmed that a team has been designated to run Venezuela, with key figures such as Secretary of State Marco Rubio engaging with Rodríguez. While US forces are expected to provide security around critical infrastructure, broader public security and the protection of citizens remain pressing challenges in a country plagued by gangs, paramilitary groups, guerrillas, and transnational cartels. Hundreds of political prisoners still remain locked up, with their fate of top importance.

Third, today’s actions are the first concrete deliverables of Trump’s new National Security Strategy with its heavy emphasis on the Western Hemisphere. And the president has made it clear that future US operations in the region are fair game as well. Trump mentioned Colombia and Cuba as countries whose leaders should now know the consequences of not cooperating with the United States.

Fourth, the United States now bears responsibility for the eventual outcome in Venezuela. The challenge will be ensuring a “safe and judicious transition” in a country where many entrenched actors are likely to resist meaningful change, but where real change is fundamental to US interests and to the Venezuelan people.

​Some commentators are arguing that the strike is illegal under international law. I am not a legal expert, but it’s worth noting that even though heads of state do enjoy immunity from prosecution under international law, few world leaders recognize Maduro as a legitimate head of state. Since 2019, the Organization of American States, the premier multilateral body for the hemisphere, has refused to recognize Maduro as president following that year’s stolen elections.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

A win for regional security, the Venezuelan people, and the US military 

There are five winners of the successful US operation to remove Maduro from power in Venezuela: 

1. US, regional, and global security. The world is better off without an anti-American dictator who traffics narcotics, prompts irregular migration flows, and provides a foothold to the “axis of aggressors” (China, Russia, and Iran) in the Western Hemisphere.
2. The Venezuelan people. They now have the opportunity for a better government and a freer and more prosperous future.
3. US military power. This shows that the US military is still the finest fighting force in the world and may help Washington find its confidence and get over its Iraq-Afghanistan hangover.
4. Special operations forces. They have been eager to show higher-level officials in Washington that they are still relevant after the war on terror—and indeed even more so now.
5. Trump’s foreign policy. This is a dramatic foreign policy victory, among the top three of the first year in Trump’s second term, alongside degrading Iran’s nuclear program and increasing NATO defense spending.  

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s director of studies. 

This operation sends a signal to Beijing and Moscow 

The “Trump Corollary” to the Monroe Doctrine, as outlined in the 2025 National Security Strategy, is officially in effect. Just days after the Chinese People’s Liberation Army was reported to be war-gaming combat operations in the Western Hemisphere, and a new official Chinese strategy for Latin America refused to recognize the region as of special significance to US security, Washington has demonstrated a long-overdue commitment to hemispheric security.

The Trump administration’s removal of Maduro from power in Venezuela is not simply a message to antagonistic regimes in the hemisphere, like Cuba and Nicaragua; it is a global reestablishment of deterrence that will be seen in Beijing and Moscow as an unambiguous sign of the Trump administration’s commitment to a security order compatible with American interests.

Going forward, the administration has a unique opportunity to build upon the success of its pressure campaign against Maduro to reestablish overwhelming US strategic predominance in the hemisphere, including by tacitly shaping a post-Maduro settlement that ensures extra-hemispheric powers like China and Russia are excluded from meaningful influence in Caracas. The success of this operation creates a once-in-a-generation opportunity for Washington to translate its security preferences into strategic reality.

—Alexander B. Gray is a nonresident senior fellow with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. Gray most recently served as deputy assistant to the president and chief of staff of the White House National Security Council.

Opening up Venezuela’s energy industry will come down to the details 

From an energy perspective the key questions will be who governs the country, the timeline and nature of a transitional government, the security situation in the country at large and in the oil production sites and ports, and if the US government modulates the sanctions regime and the blockade to financially support a potential transitional government. At this writing, Trump has declared that the United States will run the country until the situation is stabilized, and he declined to endorse González. Trump also asserted that US oil companies would return to Venezuela. 

It remains to be seen whether there will be resistance from loyalists of the regime and remaining members of Cuban intelligence. Few US companies are likely to return to the country until there is a reliable legal and fiscal regime and stable security situation. Companies that have existing operations are much more likely to revive and expand them if the environment is secure.

It is highly uncertain how the US administration will approach exports and management of those revenues. It could allow oil currently on tankers to be exported, expand licensing, and permit Venezuela to sell oil at market prices, all for the purpose of maximizing national revenue. It is also possible that those revenues would go into a blocked account for the benefit of a new Venezuela government.

But for now, we have no details about how these fiscal and legal arrangements will evolve. Until there is clarity on sanctions and licensing and more information on who is actually managing the central bank and ministry of finance, the prospects for Venezuelan oil production and exports will remain uncertain.

—David Goldwyn is president of Goldwyn Global Strategies, LLC, an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

The US strikes most likely fall afoul of international law

Maduro oversaw a brutal regime engaged in violent human rights violations against Venezuelan citizens. Regardless of this, the US strikes on Venezuela were illegal under international law.

The United Nations (UN) Charter forbids use of force against a state’s “territorial integrity or political independence,” with exceptions permitted for self-defense and Security Council authorizations. Self-defense requires that the force used be necessary and proportional, and that the threat be imminent. None of these conditions appear to have been met. As such, the attacks appear to fall under Article 3(a) of the UN General Assembly’s definition of the crime of aggression. This provision is customary, meaning it is binding and applies regardless of US arguments that the actions are legal under domestic law.

The use of force also marked the onset of an international armed conflict between the United States and Venezuela, triggering the applicability of international humanitarian law. While so far most targets appear to have been military, Trump threatened a second “and much larger” attack “if needed.” Trump’s announcement that the United States will “run” Venezuela and may deploy forces also raises alarms around potential occupation.

Finally, as sitting head of state, international law affords Maduro full personal immunity under domestic courts—including in the United States. Since 2019, the United States and other countries have not recognized Maduro as head of state, in response to widespread election fraud, and he is widely considered an illegitimate ruler. However, as argued by the French Cour de Cassation, this immunity should apply regardless of whether a state recognizes a head of state’s leadership—precisely to prevent politically motivated arrests.

While Maduro must be held accountable for the human rights violations he has inflicted, the United States’ unlawful actions must be condemned. Allowing such precedents to go unchallenged will further undermine respect for international law, state sovereignty, and civilian protections.

—Celeste Kmiotek is a senior staff lawyer for the Strategic Litigation Project at the Atlantic Council.

Delcy Rodríguez cannot guarantee the stability Trump wants

The US decapitation operation against the autocratic regime that ruled Venezuela for over twenty-five years—first led by Hugo Chavez, then by Maduro—marks the beginning of the restoration of democracy in the country. The regime was unable to mount any effective defensive military actions. Its usually strong communication apparatus failed catastrophically during the first twelve hours following the US operation to take Maduro from his residence inside Fuerte Tiuna, the principal military base of the Venezuelan army. The military command-and-control chains were clearly disrupted.

Venezuelans are eager to reclaim their country and restore democracy. There is hope that González—who was rightfully elected president in 2024—will soon take the oath, and many trust that María Corina Machado will successfully lead the transition process, which may take months or even years. The second-in-command figure in the regime, Rodríguez, who was sworn in today to take Maduro’s place, does not appear to have the backing of all factions within the ruling party. Rodríguez cannot guarantee the stability required for the business operations Trump emphasized several times during his remarks on the operation. Chavismo no longer enjoys the widespread popular support it had two decades ago.

The Venezuelan people who have fought nonviolently against a highly repressive regime for over two decades will continue their struggle until freedom and democracy are fully restored.

—Iria Puyosa is a senior research fellow at the Atlantic Council’s Democracy+Tech Initiative. Puyosa was previously an associate professor at the College of Social Sciences at the Central University of Venezuela.

The mission is not accomplished until Venezuelans get free and fair elections 

With Rodríguez appearing on state television Saturday afternoon and convening a “National Council in Defense of the Nation” made up of every heavyweight in the ruling party, it seems likely that she is indeed serving as the country’s de facto leader—for now.

While she claimed that Maduro remains “the only president,” called for his release, and said that Venezuela would never be “a colony of any empire,” she also noted that the Supreme Court will be reviewing a national emergency decree signed by Maduro as his last executive act. This points to further announcements to come, in which Rodríguez will almost certainly claim that she is now the country’s interim leader.

Whoever emerges on top of the power struggle in Caracas, it is fundamental that the United States use its considerable leverage to incentivize a roadmap for a transition. It is essential that the Venezuelan people are presented with a credible plan for free and fair elections, the release of political prisoners, and a path toward economic recovery. The United States can help pave this path by offering gradual, phased sanctions relief in exchange for verifiable progress toward democratization.

It is logical for the United States to advance its own energy, migration, and broader geopolitical interests in Venezuela, but US policymakers should not consider their mission accomplished until Venezuelans’ fundamental right to elect their own leaders is restored.

—Geoff Ramsey is a nonresident senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center.

Multilateralism failed Venezuela. But it failed long before today.

Many today are emphasizing the importance of multilateralism and warning about its erosion as a result of the unilateral US actions in Venezuela. But the reality is different: Multilateralism in the face of the Venezuelan crisis did not fail today—it failed years ago.

That failure—resounding, stark, and undeniable—is measured in millions of exiles, many now undocumented or living in precarious conditions across dozens of countries, constituting one of the largest forced displacements in the world without a conventional war or internal armed conflict. It is measured in millions of families torn apart by a regime that systematically destroyed its own society: opposition parties dismantled, dissidents disappeared, deaths under custody, widespread torture, the mass closure of independent media, expropriations that crippled the productive economy (years before any international sanction), hyperinflation that impoverished millions of working families, and sustained repression.

Meanwhile, diplomacy and multilateral institutions proved unable to deliver a single effective negotiation process leading to an orderly, peaceful, and negotiated transition—despite years of appeals by millions of Venezuelans who voted, protested, and exhausted every available civic mechanism at enormous personal cost.

And international justice? The International Criminal Court, with an investigation open since 2021, has yet to issue a single indictment—despite extensive documentation of crimes against humanity by the United Nations Fact-Finding Mission on Venezuela, Human Rights Watch, Amnesty International, and hundreds of victims. Their testimonies provided detailed accounts of a sophisticated, systematic, and nationwide apparatus of repression designed to crush dissent that has been operating in the country for several years under this regime.

Looking ahead, a central concern among Venezuelans—both inside and outside the country—is whether stability will follow, and what political order will emerge from the vacuum left by Maduro, particularly given the competing factions within the former regime. What is clear is that Venezuelans expressed their will at the ballot box: In the July 2024 presidential election, the opposition—led by González and Machado—won decisively, a result the Maduro government refused to recognize, further deepening the crisis that culminated in today’s events.

Any sustainable transition will require that this legitimate leadership, with broad and demonstrable support inside Venezuela, be empowered to lead a democratic transition through a credible and legitimate process.

—Nizar El Fakih is a nonresident senior fellow with the Strategic Litigation Project at the Atlantic Council.

Success will require years-long US diplomatic and economic efforts in Venezuela

While it’s far too soon to know Venezuela’s ultimate disposition following today’s operations, we do know that Trump says that the United States will essentially “run” the country for now. Trump has prided himself on touching many conflicts around the world—from those between Rwanda and the Democratic Republic of the Congo and Azerbaijan and Armenia to Gaza and Ukraine—quickly claiming several as resolved. But one thing the administration has yet to prove in nearly all cases, especially Venezuela, is whether it has the sustained attention span for the years-long diplomatic and economic efforts required to bring societies out of chaos and repression.

Even a short-term endeavor of running Venezuela will cost significant US military and taxpayer resources. It will also require real diplomatic finesse to ensure that the United States remains a credible leader in the region, which has now become the centerpiece of US national security strategy. Meanwhile, China will likely continue its lower-key but serious commitment to economic development in Latin America and elsewhere around the world.

Venezuela will be a test of Trump’s strategy for US dominance in the region and whether his collective peace and security efforts—from Caracas to Kyiv—can result in real strategic advantages for the United States. The alternative would be a stack of unfinished US projects that leave real lives affected in the wake.

—Tressa Guenov is the director for programs and operations and a senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. She previously served as the principal deputy assistant secretary of defense for international security affairs in the Office of the Under Secretary of Defense for Policy.

Watching Venezuela from Tehran

From a technical and military standpoint, the US operation in Venezuela signals to Iran that Washington is increasingly confident operating against Russian-derived, layered air-defense architectures without needing to dismantle them through a prolonged, overt suppression of enemy air defenses (or SEAD) campaign. Venezuela’s inventory—anchored by S-300VM, Buk-M2, and point defenses such as Pantsir-S1, supported by Russian and Chinese radars—closely resembles the architecture Iran fields around critical sites. Yet the US operation appears to have achieved its objectives without forcing visible air-defense engagement.

Available reporting suggests the US operation evaded detection and engagement by leaning on standoff effects; persistent intelligence, surveillance, and reconnaissance (ISR); electronic attack; and compressed timelines. Under such conditions, systems like Buk and Pantsir may never generate a usable firing solution, while high-value S-300-class assets become difficult to employ without sustained targets, clear attribution, and political authorization. The issue is not only theoretical capability, but whether layered defenses can meaningfully influence outcomes during brief, tightly sequenced operations.

This reinforces a broader pattern Iran will recognize. Russian air defenses have struggled to impose decisive effects in other theaters—including Syria, where Israeli strikes have repeatedly penetrated layered systems, and Ukraine, where Pantsir, Buk, and S-300 variants have suffered attrition under modern ISR-strike cycles. 

Equally relevant is the diplomatic dimension. In Venezuela, as with Iran, US military action coincided with standing diplomatic offers—sanctions relief, normalization steps, and elements of proposed deals—kept on the table before and during the use of force. The combined signal to Tehran is that neither reliance on Russian air defenses nor the slow-rolling of US proposals necessarily alters the pace or structure of US action.  

Recent US strikes in Nigeria send a reinforcing signal. There the United States acted without prolonged warning or phased escalation, using remote airstrikes supported by the Nigerian government. These operations underscore a reduced tolerance for drawn-out escalation dynamics and a preference for short-duration, outcome-oriented use of force.  

For Iran, the relevance lies not in the specific targets or theaters, but in the demonstrated willingness of the United States to move decisively once thresholds are crossed. 

—Kirsten Fontenrose is a nonresident senior fellow at the Scowcroft Middle East Security Initiative in the Atlantic Council’s Middle East Programs. She was previously the senior director for the Gulf at the National Security Council.

Maduro’s ouster will cause shock waves in the Middle East

The success of Trump’s bold operation to remove Maduro will cause global shock waves, including in the Middle East. Saturday’s successful operation puts Trump’s “locked and loaded” message on Friday to Iran’s leaders in a different perspective. However, the Venezuelan operation took months of planning, and there are no signs that the United States has the capability, or the intention, to pull off something similar in Iran.

Still, as a demonstration of Trump’s willingness to back months of rhetoric against Maduro with dramatic—and effective—action, Saturday’s operation should concern Iran’s leaders. Those who know their history—and the Trump administration has some like Sebastian Gorka who do—will remember that in 1956 the United States failed to follow up on its encouragement of Hungarian protesters against Soviet rule. The Trump administration ought to be aware of the dangers of vague rhetoric that cannot be followed up with action. Trump’s words to Iran and the Middle East in the coming weeks need to be made with steely-eyed capability and intention.

—Thomas S. Warrick is a nonresident senior fellow in the Scowcroft Middle East Security Initiative and a former deputy assistant secretary for counterterrorism policy in the US Department of Homeland Security.

Three scenarios for what could come next 

The US operation to capture Maduro and transfer him to stand trial in the United States on criminal charges dating back to 2020 marks a decisive inflection point for Venezuela. What follows will hinge less on Washington’s next move than on the calculations of the regime’s remaining power brokers, military commanders, intelligence chiefs, and political enablers who are now confronted with a stark choice: negotiate an orderly exit or risk annihilation alongside a collapsing system.

In the best-case scenario, Maduro’s arrest catalyzes elite defection. Faced with legal exposure, sanctions, and loss of patronage, regime underlings could seek guarantees for safe passage, limited amnesty, or third-country exile in exchange for transferring authority to the legitimately elected opposition. Such a negotiated handover would avert mass violence, stabilize institutions, and open a narrow but viable path toward economic recovery and international reintegration. 

Another scenario is that the United States has been working secretly with elements of the Venezuelan government who will take over. 

The worst-case scenario is far darker. If regime remnants reject negotiation and fragment, Venezuela could descend into a protracted guerrilla conflict. Armed colectivos, criminalized military units, and narco-linked factions could wage asymmetric warfare, turning parts of the country into contested zones and prolonging civilian suffering long after the regime’s formal collapse. 

 —Alex Plitsas is a nonresident senior fellow with the Scowcroft Middle East Security Initiative, the head of the Atlantic Council’s Counterterrorism Project, and a former chief of sensitive activities for special operations and combating terrorism in the Office of the Secretary of Defense.

The post Experts react: The US just captured Maduro. What’s next for Venezuela and the region? appeared first on Atlantic Council.

1. What does this blockade mean for Venezuela?

This blockade adds significant pressure to Maduro’s regime, as these shadow tankers act as a financial lifeline that Maduro relies on to sustain his corrupt patronage system. Sanctioned vessels operate in a global black market, transporting US-sanctioned oil that has been critical over the years to the ability for Maduro to stay in power.

Since the initial US seizure of the Skipper last week, Venezuelan crude exports have fallen sharply, effectively targeting Maduro’s main source of income. Venezuela relies entirely on tankers to export its oil, and disrupting the illegal trade that runs on these sanctioned tankers weakens Maduro’s grip on power. As of last week, more than thirty of the eighty ships in Venezuelan waters were under US sanctions.

Frankly, with the size of the US fleet amassed in the Caribbean, it was only a matter of time before this blockade began. It will be important to see which of these shadow vessels continue to try to reach Venezuelan shores and which vessels the United States determines it has the authority to seize. These ships are part of a large shadow shipping network designed to evade US sanctions and mask the destination of Venezuelan crude. This illegal trade network delivers oil primarily to China, and to a lesser extent Cuba, employing several tactics to disguise the origin, name, and shipping routes to evade US regulations.

The blockade of these sanctioned vessels provides an additional source of leverage for the United States. By cutting off a significant part of the regime’s income, the United States gains an additional chip to put on the table in discussions on ending Maduro’s dictatorship in Venezuela. This move elevates the Caribbean campaign from a counter-drug operation to one that is also cutting off the financial lifelines to Maduro, who the United States has designated as the leader of the Cartel de los Soles.

—Jason Marczak is vice president and senior director at the Atlantic Council’s Adrienne Arsht Latin America Center.

2. What is the likely impact on oil markets in the region and globally?

Venezuela exported a little over 780,000 barrels a day in October of this year, 100,000 of which came to the United States and the rest directly or indirectly going to China. It is highly uncertain whether all or only a portion of those exports will be impacted by the blockade.

The president referred to a blockade of “sanctioned vessels,” which could potentially exclude Chevron’s 100,000 barrels per day. A respected tanker tracking outfit suggested that only 40 percent of the vessels transporting Venezuelan crude are sanctioned.

The president also made reference in social media to Maduro and his government being labeled a foreign terrorist organization. We do not yet have designations or explanations from the Treasury or State Department. It is possible that any person or entity doing business with the Venezuelan government or its national oil company, Petróleos de Venezuela, S.A. (PDVSA), could therefore be exposed to liability. In this case, nearly all of Venezuela’s exports (oil or otherwise) could be impacted.

So far, the oil market has shrugged its shoulders at the blockade. Brent crude was up 2.5 percent overnight, to sixty dollars a barrel, according to Bloomberg. That is a pretty modest impact. This could be the result of the market having already priced in the impact of higher levels of naval interdiction of Venezuelan oil exports, high levels of spare capacity, or weak winter oil demand. Ordinarily, one million barrels a day of displaced oil translates into about ten dollars on the oil price, so a complete blockade of all of Venezuela’s exports, if not replaced by increased by OPEC spare capacity or commercial reserves, would be in the range of five dollars to eight dollars a barrel. Everything will depend on how the blockade is enforced.

—David Goldwyn is president of Goldwyn Global Strategies, LLC, an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

3. What else could the United States do to put pressure on Maduro?

Venezuela relies on revenue from sanctioned oil exports to prop up the regime and the country’s economy. Venezuela continues to sell its sanctioned oil, predominantly to China, while accepting payment in digital assets, namely stablecoins, to circumvent US sanctions. To increase economic pressure on Venezuela, the administration should consider enforcing existing sanctions on Venezuela’s oil sector, including PDVSA. Sanctions enforcement would include seizing crypto wallets and working with stablecoin issuers to seize or burn digital assets held by sanctioned Venezuelan entities. This would have an immediate impact on Maduro by taking out significant financial assets and it would be much more cost-effective for the United States and its naval forces.

Separately, as the United States increases pressure on Venezuela with a blockade, the administration should consider where the vessels will go next. As we have seen, the sanctioned tankers carrying Venezuelan oil have also carried Iranian oil. If ships cannot dock in Venezuelan ports, then the United States should anticipate where they will go instead and whose cargo they will carry, which could be Iran or Russia. The shadow fleet used by Venezuela, Iran, and Russia is a network, and to affect Venezuela, the United States needs to address the entirety of the fleet and its operators.

—Kimberly Donovan is the director of the Economic Statecraft Initiative within the Atlantic Council’s GeoEconomics Center. She previously served as acting associate director of the Financial Crimes Enforcement Network’s (FinCEN) Intelligence Division, in the US Treasury Department.

4. What does the blockade mean for Russia’s shadow fleet?

The US move against Venezuelan oil exports may matter less for Venezuela itself than for Russia’s shadow fleet, because it signals a shift from symbolic sanctions toward more assertive enforcement against maritime sanctions evasion.

Russia today relies on a sprawling shadow fleet—aging tankers, opaque ownership structures, flag-hopping, ship-to-ship transfers, and weak or fictitious insurance—to keep oil flowing despite Western restrictions. What the Venezuela case demonstrates is that Washington is increasingly willing to treat sanctions evasion not just as a financial violation, but as a maritime security problem.

This matters because Russia’s shadow fleet is not isolated. Many of the same vessels, intermediaries, insurers, and ship-management networks service Russian, Iranian, and Venezuelan crude interchangeably. Pressure applied in one region exposes vulnerabilities across the entire system. Even limited interdictions force tankers to go dark longer, take riskier routes, rely on fewer ports, and accept higher freight and insurance costs—raising the overall cost of Russian oil exports.

For Moscow, the immediate risk is not a sudden collapse in exports but growing friction and uncertainty. Each escalation increases the probability of seizures, port refusals, or secondary sanctions on service providers—factors that reduce the efficiency and scalability of Russia’s energy revenues over time.

There is also a deterrent effect. By demonstrating that shadow fleets are visible, traceable, and vulnerable, the United States raises the strategic risk premium for Russia’s oil trade—even if enforcement remains selective.

This dynamic is being reinforced in Washington on the policy front. A bipartisan group of US senators has introduced the Decreasing Russian Oil Profits (DROP) Act of 2025, which would authorize financial sanctions on foreign buyers of Russian petroleum products and seek to choke off a key source of Kremlin revenue. The proposal includes targeted measures to penalize entities anywhere in the world that continue to purchase Russian oil, with narrow exemptions tied to support for Ukraine, underscoring Congress’s intent to close loopholes in the sanctions regime and further isolate Moscow’s energy exports.

The key takeaway is this: Russia’s shadow fleet survives on the assumption of tolerance and ambiguity. The Venezuela action suggests that assumption is weakening. For a war economy dependent on energy revenues, that shift matters.

—Agnia Grigas, PhD, is a nonresident senior fellow at the Atlantic Council’s Eurasia Center working on energy and geopolitical economy.

The post What Trump’s Venezuela oil blockade means for Maduro and the world appeared first on Atlantic Council.

All of this unfolded against the backdrop of a new administration in Washington that has been unafraid to shake up decades of US diplomatic conventions.

As 2025 comes to a close, our senior analysts at the Atlantic Council’s Middle East Programs unpack the most prominent trends and topics they are tracking for the new year.

Khalid Azim: Three trends shaping the economic landscape

Gissou Nia: Demands for justice—and protests driven by the thirsty

Karim Mezran: North Africa is a rising priority for US policy

Ahmed Fouad Alkhatib: Key questions remain for Palestinians

Victoria J. Taylor: Iraq must maintain unprecedented stability

Daniel B. Shapiro: A political transition in Iran approaches

Nathanael Swanson: Will the Israel-Iran cease-fire hold?

Jonathan Panikoff: A duality of possible trajectories

Three trends shaping the economic landscape

Three major macro trends will shape the Middle East and North Africa in 2026, each carrying profound implications for the region’s economic trajectory.

1. The pressure of lower energy prices
As energy revenues soften, governments across the region will be forced to make more disciplined, risk-adjusted investment decisions. The era of abundant fiscal cushions is shifting toward one that requires sharper prioritization, operational efficiency, and a clearer sense of expected returns. This will test policymakers’ ability to allocate capital effectively and to reduce long-standing subsidies and support for entrenched constituencies. These choices become even more consequential as a growing cohort of young people demand economic opportunity, purpose, and social mobility.

2. Rising debt and the cost of ambition
Fiscal tightening will coincide with an accelerating need for investment. Across the Gulf, governments are committing billions to data centers, artificial intelligence ecosystems, new power generation, and other foundational infrastructure. These projects will increasingly be financed through borrowing, especially as the current account deficit grows. The result will be higher debt levels and rising debt-servicing costs. Countries that clearly articulate their economic value proposition and demonstrate credible reform will have a competitive advantage in the capital markets. Those that do not may face steeper financing costs and slower momentum in their diversification strategies.

3. Vision 2030 ten year anniversary: A regional bellwether
Saudi Arabia’s Vision 2030 has already reshaped the kingdom’s economic and social landscape through diversification, investment in future industries, and the creation of a more open and optimistic society. The plan’s tenth anniversary in 2026 marks a critical milestone, not only for the kingdom but for the region. The next decade will be defined not by the wealth beneath the ground, but by the wealth of human talent above it. How effectively the kingdom transitions from resource-driven growth to human capital-driven growth will influence the MENA region’s competitiveness for a generation.

Khalid Azim is the director of the MENA Futures Lab at the Atlantic Council’s Rafik Hariri Center for the Middle East.

Related reading

MENASource

Nov 20, 2025

Saudi Arabia’s next horizon: Building human capital beyond Vision 2030

By Khalid Azim

Riyadh still needs to take fully support small and medium-sized enterprises—the true engines of job creation.

Economy & Business Middle East

Demands for justice—and protests driven by the thirsty

In 2026, expect to see more widespread protest movements for change across the Middle East and North Africa fueled by climate change and authoritarian mismanagement. Analysis of global protest movements in 2025 focused heavily on the young age of the protesters. While youth demographics have gained relevance as new communication tools have emerged over the last decades (in 2011, it was Twitter organizing the youth in the “Arab Spring”; in 2025, it’s the gaming app Discord organizing Morocco’s “Gen Z” protests), the evergreen undercurrent is frustration with corruption and elites. Resources have become scarcer due to global warming and authoritarian mismanagement, and the globe has become increasingly and overtly transactional as it shuns diplomacy in favor of kinetic means and “might is right” politics. The Middle East and North Africa are profoundly impacted by both these negative trends. With water running out in Tehran and water instability around the Nile Basin and the Tigris and Euphrates River, expect the next wave of regional protests to be driven not just by the youth, but by the thirsty.

Regional victim and survivor-centric demands for justice will also continue to grow in 2026 in countries that are emerging from conflict, experiencing government transitions, or where restive populations wish to usher in a change of rule. There is no clearer example than in Syria, where Assad’s exit one year ago opened the space for a new Syria and where a previously exiled network of Syrian lawyers, researchers, and advocates now work on transitional justice processes from inside their own country. In Iran, where the population is publicly demanding regime change, victims of protest violence, executions, and custodial deaths have organized powerful advocacy groups to demand that international processes deliver justice where domestic courts are unable and unwilling to do the job. And across the region, while many governments have been complicit in the violence in Gaza, the Arab street stands at odds with those governments and instead has demanded—alongside much of the world—that the perpetrators of the violence in Gaza be held to account.

Gissou Nia is the director of the Strategic Litigation Project at the Atlantic Council.

Related reading

MENASource

Dec 8, 2025

States shouldn’t waste the chance to establish a Syria Victims Fund

By Kate Springs, Celeste Kmiotek

A centralized fund would better support victims of international law violations in Syria, who face unique challenges.

Democratic Transitions International Norms

North Africa is a rising priority for US policy

North Africa is poised to move closer to the center of US regional policy for 2026. The past year of quiet US engagement, including the work of US President Donald Trump’s Senior Advisor Massad Boulos, is beginning to reduce tensions and open political space. Algeria and Morocco are edging towards some degree of a detente, creating space for practical steps on the Western Sahara file.

Additionally, Libya may see modest but meaningful progress. Headway on an agreement between the divided governments on a unified development funding mechanism may reduce parallel spending and put less pressure on the dinar, as well as release the funds for long-awaited reconstruction and modernization projects. The decision to include Libyan units from both east and west in AFRICOM’s Flintlock 2026 special operations forces exercise suggests an incremental movement on military unification in Libya, an area where US diplomacy with key partners has grown more active.

Egypt will remain an integral partner as Washington tries to deal with situations in Gaza, states located on the Red Sea, and Sudan. At the same time, renewed attention to commercial diplomacy signals a shift toward advancing US business interests across North Africa.

Taken together, these dynamics make the region harder to overlook and suggest that 2026 may be the year North Africa becomes a sustained policy priority in Washington.

Karim Mezran is the director of the North Africa Initiative and resident senior fellow with the Rafik Hariri Center and Middle East Programs at the Atlantic Council.

Related reading

MENASource

Oct 3, 2025

US, Italy, and Turkey alignment could push the needle in Libya

By Frank Talbot and Karim Mezran

The US, Italy and Turkey can—through balanced diplomacy—reinforce the economic opportunities presented by institutional unification in Libya.

Italy Libya

Key questions remain for Palestinians

This was a tectonic year of realignments for the Palestinian people, as well as their heavily divided and largely powerless leadership. Next year is likely to be equally important and trend-setting—and four major threads have emerged that could shape its trajectory.

For Palestinians and what’s next for Gaza, the top four trends to look for in 2026 are the following:

1. The Trump administration’s commitment to the Palestinian issue and its willingness to engage the Palestinian Authority, which remains subject to US sanctions and restrictions. Will elements of a comprehensive peace deal between Palestinians and Israelis, like the one that Trump proposed during his first term, return?
2. What becomes of the Gaza cease-fire that the United States and international players are hoping to cement into a lasting peace deal that transforms the coastal enclave? The year 2026 is either going to be one in which Hamas is disarmed and fundamentally changed—or it will be one in which the Palestinian terror group continues to dominate Gaza’s affairs and prevent substantive change to revitalize the decimated Strip after two years of devastating warfare.
3. The prospect of Saudi-Israeli normalization—which could unlock immense potential for the kingdom, the Palestinians, Israel’s regional integration, and a regional anti-Iran coalition—is enormous. The year 2026 will set the tone for whether Saudi Arabia proceeds with integration based on its often-stated requirement for Palestinian statehood, or if this ends up in further stalemate and stagnation.
4. The fourth critically significant trend to watch is the impact the Gaza war and Israel will have on influencing voters in the upcoming midterm elections. As with the Trump election, this issue increasingly played a role in rallying US voters to the ballot box, including the high-profile race to elect New York City Mayor-Elect Zohran Mamdani. The year 2026 will reveal whether this trend persists or if it is a fad that passes once the Gaza war comes to a more permanent end.

Ultimately, 2026 will either mark the end of the Gaza war and the initiation of reconstruction and hope in the Strip—or it will perpetuate a state of stagnation and stalemate, risking a return to fighting, devastation, and more tragic deaths.

Ahmed Fouad Alkhatib is the director of Realign For Palestine at the Atlantic Council.

Related reading

MENASource

Nov 10, 2025

A little-discussed point in Trump’s Gaza plan could be an opportunity to build interfaith understanding

By Peter Mandaville

Peace efforts don’t need more gleaming Abrahamic baubles, they need a genuine commitment to supporting grassroots religious peacebuilding.

Civil Society Freedom and Prosperity

Iraq must maintain unprecedented stability

Amid continued regional turmoil, Iraq ended 2025 in a period of relative stability and security, avoiding being drawn into the Twelve Day War between Israel, Iran, and the United States—and holding successful parliamentary elections. The challenge for Iraqi political leaders in 2026 will not only be to maintain this unprecedented stability, but also to navigate Trump administration pressure to rein in Iran-aligned militias and avoid being pulled into the broader US maximum pressure campaign against Iran. Iraq is also likely to continue its efforts to appeal to the Trump administration through investment, pitching new energy deals to US companies, but it is not yet clear whether these efforts will be successful.

With Iranian influence in the region at an all-time low, Iraqi leaders have an opportunity to forge a more independent foreign policy that prioritizes continued partnership with the United States and differentiates Iraqi from Iranian interests. Core to this effort will be progress toward Iraq’s regional integration and strengthened political and economic ties to the Gulf and other regional partners such as Jordan and Egypt. In the face of Iraqi efforts to challenge the militias and strengthen partnerships with the United States and the Gulf, 2026 may bring attempts by Iran and Iran-aligned militias to act as spoilers who obstruct Iraq’s progress and imperil Iraq’s stability. Iraq’s next prime minister has an opportunity to transform the country.

The next year will be critical in determining whether the Iraqi government can seize the opportunity and whether the United States and other regional partners will support it in doing so.

Victoria J. Taylor is the director of the Iraq Initiative in the Atlantic Council’s Middle East program.

Related reading

Dispatches

Dec 10, 2025

Dispatch from Iraq: The biggest challenge awaiting the country’s next prime minister

By Victoria J. Taylor 

A recent visit to Iraq following parliamentary elections reveals a growing divide between the political elite and the people.

Elections Iraq

A political transition in Iran approaches

Political transitions are hard to predict, but there is no doubt Iran is approaching one. With a frail, unpopular, eighty-six-year-old Supreme Leader Ayatollah Ali Khamenei nearing his actuarial and conceivably political limits, 2026 could be the year.

Any transition has the potential to unleash dramatic changes in Iran, across the region, and in relations with the United States. The potential positive implications of new Iranian leadership and a change of approach are massive: relief from brutal suppression for the Iranian people, new possibilities in nuclear diplomacy and toward normalization with the United States, broadened detente with Iran’s Arab neighbors, and an end to the arming of violent terrorist proxies across the region that have squandered hundreds of billions of dollars of Iranian resources—driven by an ideological crusade to destroy Israel—while the Iranian people endure manmade water and electricity shortages. The beneficial effects would be felt from Iran to Lebanon to Gaza to Yemen and beyond.

None of this is preordained or automatic. A transition could cement a new generation of the Islamic Republic’s clerical leadership, bring to power an even more hardline Islamic Revolutionary Guard Corps, or devolve into chaos and civil war with massively destabilizing effects. What Washington should engage in through 2026 is transition planning—not in order to cause a regime change, which must be left to the Iranian people, but to be prepared to provide support for the Iranian people, resources and expertise, potential sanctions relief, and coordination with international partners to assist in steering a transition when it comes toward one of the better possible outcomes. The United States has moved smartly in 2025 to support a stable Syrian transition, and while the jury is still out on long-term stability there, there has been significant progress. An even more consequential transition awaits in Iran. Washington must not be caught flat-footed.

Daniel B. Shapiro is a distinguished fellow with the Atlantic Council’s Scowcroft Middle East Security Initiative.

Will the Israel-Iran cease-fire hold?

Following the Twelve Day War in June, Iran retains large quantities of highly enriched uranium and advanced centrifuges, without oversight by the International Atomic Energy Agency. At the same time, while Iran’s missile program and support for nonstate proxies were diminished, Iran is rebuilding its capabilities and still threatens US, Israeli, and regional security.

After initially declaring Iran’s nuclear program obliterated, Trump has also repeatedly called for resumed negotiations and a new nuclear deal with Tehran. Although still nominally implementing the US “maximum pressure” campaign, Trump also made a high-profile gesture by inviting Iranian President Masoud Pezeshkian to the Gaza Peace Summit in October.

For its part, Iran appears to remain in a largely reactionary posture. It is attempting to rebuild its missile and defense capabilities but is not currently enriching uranium or advancing its nuclear program (that we know of). Foreign Minister Abbas Araghchi says Iran is open to talks at the United Nations, but also foolishly rejected the Cairo invitation. Israeli Prime Minister Benjamin Netanyahu has responded by reminding the world of the Iranian missile threat and increasingly targeting Iranian proxies. There is no written cease-fire in place, and continued peace is partially reliant on Trump holding Netanyahu back. As Israeli elections approach, will Trump’s “complete and total ceasefire” hold? Will Iran do something that gives the Israeli’s an excuse or opportunity to re-engage Iran militarily? Or will Iran give negotiations another chance? Either way, 2026 should make for a pivotal year for Iran.

Nathanael Swanson is a resident senior fellow and director of the Iran Strategy Project at the Atlantic Council’s Scowcroft Middle East Security Initiative.

Related reading

New Atlanticist

Nov 17, 2025

As elections loom, can Netanyahu balance Trump, Mohammed bin Salman, and his political future?

By Daniel B. Shapiro

The Israeli prime minister’s preferred path to survive a treacherous election will be to show Israeli voters that he is advancing their country’s regional integration and staying within the US president’s embrace.

Israel Middle East

A duality of possible trajectories

2026 is a year of potential opportunity—and potential peril—for the Middle East.

Gulf states are determined to advance their political, economic, and security autonomy. Syria and Lebanon could either emerge as models of forward movement from instability or revert to sectarian strife and conflict. Pockets of normalcy could continue to advance in Iraq as exists today in parts of Baghdad and other cities, or it could descend back into political stasis and conflict. Israel could find itself more secure in the region by continuing to undertake kinetic strikes, or it could choose the path of less violence by completing meaningful security and cease-fire agreements with its neighbors. Choose the wrong option, however, and Israel could find itself more vulnerable to threats on its borders, not less. Palestinians could find space to grieve and begin to rebuild after two years of devastation—or face continued violence from West Bank settlers and a renewed war in Gaza, as well as some intra-Palestinian conflict. Jordan and Egypt will continue to muddle through their economic challenges and associated domestic social and political pressures, or this will be the year that they face collapse, and the world will look back and say the warning signs were there, we just missed them. 

Most of the region has an opportunity at this moment in which it can seize and advance its desire for greater autonomy, global influence, and further integration. The Middle East can envision a calmer, more prosperous region driven by technological opportunity across sectors, including by leveraging artificial intelligence and US-exported advanced chips, while taking advantage of the economic integration pathways that are being developed, such as IMEC.

But the duality of possible trajectories laid out above reflects that in the Middle East, more often than not, positive opportunities are interrupted by internal or exogenous factors that regional capitals have to manage in a manner they did not expect. How the region grapples with the enduring and emerging risks of 2026 will determine whether it can prosper as a whole or whether only some will thrive while many continue to struggle. But if those regional countries that are advancing economically, politically, socially, and in their security only look inwards and do not seek to stabilize their neighbors facing social and physical insecurity, they will risk the latter impeding their development, as well. And then 2026 will once again be a year of missed regional opportunities instead of progress.

Jonathan Panikoff is the director of the Scowcroft Middle East Security Initiative at the Atlantic Council’s Middle East programs.

The post What will 2026 bring for the Middle East and North Africa? appeared first on Atlantic Council.

Hopes are high that this moment could present momentum for the long-awaited democratic transition in Venezuela, and US policy should continue to press hard for it. Still, while Washington should continue to ratchet up pressure on the Maduro regime, a military intervention would hold first- and second-order risks to global energy and food markets.

Strikes limited to counternarcotics targets are unlikely to affect energy production or food markets. But any action attacking the regime itself or damaging single points of failure in the energy system, such as ports, is another matter altogether. Some proponents of military intervention in Venezuela are hopeful that any intervention would be relatively small and contained; skeptics, conversely, warn that air strikes could unleash unpredictable forces and lead to “difficult choices about whether and how to escalate.” With President Donald Trump reportedly seeking to speak directly with Venezuelan strongman Nicolás Maduro, a diplomatic solution may also emerge. We leave it to others to assess the dynamics and pathways of a coercive campaign. Still, if a small-scale intervention becomes a large one, several consequences are likely. 

Even with high US domestic oil production, spare production capacity in the Gulf, and a well-stocked US Strategic Petroleum Reserve buffering crude markets, the loss of Venezuela’s heavy-sour barrels would tighten already-strained diesel markets. More dangerously, a conflict could spill over into regional oil or ammonia infrastructure—especially Trinidad and Tobago’s Point Lisas complex—likely resulting in an increase in fertilizer and food prices, which could potentially set off another bout of global inflation. 

Global oil markets and Venezuela 

Although it is still a significant player, Venezuela is at present not as important in oil markets as it was in pre-Hugo Chávez times. Venezuela exports stand at 800,000 barrels per day (bpd), or a little under 1 percent of total world oil consumption (although exports briefly exceeded one million bpd in September). Most export volumes head to China, directly or indirectly, while US imports have fallen below 100,000 bpd in recent months. 

In the event of a US military intervention, Venezuelan production and exports would almost certainly plummet. Furthermore, US military strikes on Venezuelan territory could cause the regime to retaliate, especially if the United States attacked Venezuelan military installations or leadership offices. Venezuelan retaliation could take several forms, including sabotaging production to handicap a potential successor regime, attacking neighbors that seem to be supporting US military action, and fomenting internal political instability that makes continued operation unsafe.

Venezuela’s history shows how quickly production can drop even absent a military intervention. In 2002–2003, a Venezuelan oil workers’ strike, led by opposition to then President Hugo Chávez, reduced Venezuelan oil exports from three million barrels per day to less than 200,000 barrels per day. 

At the same time, high US domestic crude and natural gas liquids (NGL) production, significant spare production capacity in Gulf states, and continued expectations for an oil market glut will put a ceiling on global oil prices—even if Venezuelan production outages occur in the short term. Additionally, the US Strategic Petroleum Reserve is well stocked. 

But the longer-term picture is much more mixed. Venezuelan production would likely require several years to recover from any large-scale US military intervention. Though imperfect, comparative experiences point to the challenge of bringing postwar oil production back online. During the US invasion of Iraq, for instance, Iraqi liquids production fell to zero for several months after the invasion; annual production did not return to pre-war levels until 2011. Libya’s experience, too, suggests a disorderly political transition can severely hamper oil production. Since Libyan leader Muammar al-Qaddafi’s overthrow in 2011, Libyan liquids production has never returned to prior levels: 2024 annual production stood at 1,188 kbpd, down 32 percent from 2010 levels.

The incompetency of the Chávez and Maduro regimes leaves open the possibility that a post-Chavismo Venezuela could eventually see higher production. Indeed, the Venezuelan opposition has released a thoughtful and credible plan for bolstering oil and mining production, including by pursuing best practices. However, rebounding production will depend on several factors. For example, capital and labor will need to return to Venezuela. State-owned Petróleos de Venezuela, SA, which is debt-laden and has deferred maintenance on key pieces of field infrastructure, will need to be overhauled. And many of Venezuela’s reservoirs, which have suffered from poor production practices, will need to be restored. 

Long-term Venezuelan outages would therefore likely lift oil prices, especially diesel. This is because Venezuela’s heavy-sour crude oil grades are highly suitable for producing diesel, which is a key input into virtually every industry. Recently, the International Energy Agency has warned that middle distillate markets—including diesel—are already tight. Accordingly, if Venezuela production is removed from the market, then diesel prices could shift higher, which is likely to increase global inflation. 

Indeed, if US policymakers undertake military intervention in Venezuela, then they should both anticipate higher inflation via diesel markets and prepare for a post-intervention environment wherein Venezuela’s oil production takes time, and requires support, to fully rebound. 

Horizontal escalation risks

A US military intervention in Venezuela might have wider regional impacts should the Maduro regime, faced with an existential threat, escalate a conflict horizontally to other countries or regions via semi-deniable proxies.

Horizontal escalation would expand the aperture of commodity-related risks. For instance, energy infrastructure in Colombia, especially pipelines, could be one such target, given links between Caracas and the ELN, a US-designated foreign terrorist organization. The ELN operates extensively in the Venezuela–Colombia borderlands, where the Caño Limón-Coveñas pipeline has been regularly attacked since it opened in 1986, including as recently as July of this year. An attack by ELN on a Colombian pipeline—either implicitly or explicitly supported by Caracas—would offer Maduro an opportunity to increase the costs of a conflict in an asymmetric or deniable manner, as even short-lived outages in Colombia would compound Venezuela’s supply losses and harm US refinery economics.  

Maduro seems unlikely to approve an attack on Colombian infrastructure, for now, given his need for a diplomatic lifeline with Colombian President Gustavo Petro, a fellow leftist. But his calculus could shift after Colombia’s upcoming legislative and presidential elections in early 2026. If leftist candidate Iván Cepeda prevails, Maduro will likely still seek to preserve ties with Bogotá, but after the election he is less likely to worry that escalation might electorally empower his opponents. If a non-leftist candidate wins, conversely, Maduro may feel freer to escalate inside Colombia. Crucially, Colombia’s exports of heavy and medium sour crude oil, including medium-sour production in Caño Limón sent to the Coveñas terminal on the Caribbean for export, are highly suitable for producing middle distillates. About 40 percent of Colombian crude oil was shipped directly to the United States in 2024, and many Panama-bound shipments are transshipped to US Gulf Coast refineries. Accordingly, losses of Venezuelan and Colombian crude may significantly impact domestic fuel prices, especially for diesel. 

Trinidad and Tobago’s ammonia supply chains are also vulnerable to disruption in a military conflict, especially one that expands beyond Venezuela. While accounting for only 2.5 percent of all global ammonia production, Trinidad and Tobago is responsible for 15-20 percent of global ammonia seaborne trade, and the country is the second-largest exporter to the United States, after Canada. This supply chain centers on Point Lisas, which sits on Trinidad’s west coast in the Gulf of Paria, directly facing Venezuela, about fifty kilometers away, leaving it exposed to disruption and retaliation in a prolonged conflict with the Maduro regime. Point Lisas has limited redundancy, with potential single points of failure such as the Phoenix Park Valve Station, a key hub for processing and routing gas feedstock to ammonia plants.

If Maduro sympathizers disrupt Point Lisas with cyber or kinetic attacks—including asymmetrical methods such as drones—then the effects will be felt throughout the Americas and potentially beyond. While the United States and Europe are Trinidad and Tobago’s largest ammonia partners by volumes, Mexico’s, Chile’s, and Brazil’s fertilizer markets are disproportionately exposed. Accordingly, an outage at Point Lisas would reverberate throughout the region. Mexico, too, would be impacted: It imported 250,000 tons of anhydrous ammonia from Trinidad and Tobago in 2024, while domestic ammonia production stood at only 319,000 tons. Due to deep US-Mexico agricultural ties—22.8 percent of US agricultural imports in 2024 by value hailed from Mexico—a fertilizer disruption at Point Lisas would likely send US, regional, and global food prices higher. 

Carry a big stick, but think before swinging

The Maduro regime is one of the world’s worst, and it lost its legitimacy long ago. And while Maduro must step down, US policymakers should think carefully about the consequences that would accompany military force.

The United States’ strong domestic oil production and Strategic Petroleum Reserve, Venezuela’s limited role in global oil markets, and a projected state of market oversupply all lower the probability of an immediate crude-oil price spike in the event of hostilities. Yet a long road ahead for Venezuela’s oil production to rebound, as well as the possibility of spillover to other oil- or ammonia-producing countries, speaks to a wider and perhaps deeper set of inflationary risks that policymakers and market participants should take into account. 

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report. 

David Goldwyn is president of Goldwyn Global Strategies, LLC (GGS), an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group.

The post How a Venezuela shock could raise global oil and food prices appeared first on Atlantic Council.

Crypto adoption is Venezuela’s response to US sanctions

In recent years, the United States has imposed sanctions on Venezuela in response to the Maduro government’s repression of opposition groups and “subversion of democracy.” Much of this US economic pressure has come since 2017, when the Trump administration issued a series of executive orders that it then expanded. In 2019, the United States enacted full blocking financial sanctions against PDVSA (the state-owned oil company Petróleos de Venezuela, S.A.) and the Central Bank of Venezuela. 

Venezuela’s oil sector was particularly exposed, given its complete reliance on PDVSA—a company already weakened by aging infrastructure and chronic underinvestment. This overreliance on PDVSA left both the energy sector and Venezuela’s broader financial system acutely vulnerable to financial sanctions.

This year, the Trump administration has increased economic pressure further, imposing a 25 percent tariff on buyers of Venezuelan oil in March. However, the Maduro government has not yielded to US economic pressure by ceding power. Instead, it has adopted sanctions evasion methods developed by China, Russia, Iran, and North Korea—a group for which my colleague Kimberly Donovan and I coined the term “Axis of Evasion” due to their shared tactics and cooperation in circumventing Western sanctions. 

Like Iran and Russia, Venezuela needed to receive oil payments from China outside the reach of Western financial oversight. Transacting with cryptocurrencies is one such evasion method, which North Korea, for example, has used in the past to launder the proceeds of cybercrime. Last year, Russia softened its restrictive stance on cryptocurrencies by allowing companies to use them in cross-border trade. Reports from this year indicate that Russia has been receiving oil payments from Chinese and Indian customers in Bitcoin and other cryptocurrencies, with transaction volumes reaching tens of millions of dollars. 

The Venezuelan government has spent several years experimenting with cryptocurrencies, most notably with the launch of the state-backed petro (PTR), which was launched in 2018 and collapsed in 2024. As US sanctions on Venezuela intensified in 2019 and the years since, the Maduro regime grew increasingly interested in leveraging digital assets to facilitate oil transactions—leading to US Department of Justice indictments against individuals brokering these deals. Over the past year, Caracas has turned to USDT, a dollar-pegged stablecoin issued by the offshore company Tether, as an alternative vehicle for international payments.

Tether has previously faced scrutiny over its alleged involvement in illicit finance and money laundering. Notably, Tether has also worked with the US Department of Justice in an investigation that led to the dismantling of the online infrastructure supporting Garantex, a sanctioned cryptocurrency exchange implicated in facilitating Russia sanctions evasion and money laundering by transnational criminal organizations. By 2024, Tether had also frozen forty-one wallets that were using USDT to evade sanctions on Venezuela’s oil. 

By the end of first quarter of 2024, PDVSA began requiring new clients to use digital wallets and make payments in USDT for spot oil deals. Subsequently, Venezuelan authorities enabled a limited number of banks and exchange houses to offer USDT to private companies, in exchange for bolívars. In July alone, an estimated $119 million in cryptocurrencies were sold to the private sector. This shift marked the growing use of cryptocurrencies, predominantly USDT, as a substitute for physical US dollars in domestic financial flows. While crypto still represents only a small share of total oil trade by value, it plays an outsized strategic role by offering sanctioned regimes a parallel payment channel outside traditional banking.

Sanctioned oil trade schemes between China and Venezuela

Similar to other “Axis of Evasion” countries, Venezuela transports oil to China via shadow fleet tankers—sometimes called “ghost ships”—employing at-sea evasion tactics such as turning off trackers during ship-to-ship transfers and rebranding the Venezuelan crude oil as Malaysian. By 2020, official Chinese imports of Venezuelan oil dropped to zero, while Malaysian oil imports surged to a sixteen-year high. 

Like Iran and Russia, most of Venezuela’s oil is refined by small independent Chinese refineries known as teapots, primarily located in Shandong province. Although China officially halted imports of Venezuelan crude after sanctions in 2019, China remains the primary destination for Venezuelan crude exports. In September, approximately 84 percent of Venezuela’s exported oil went there, either directly or indirectly. Thus, it is widely reported that Venezuelan oil goes to China, and that Venezuela ends up with USDT. What remains unknown—and needs investigation—is the payment chain that connects these two facts.

New Chinese investments in Venezuela’s oil sector

Venezuela has historically had investments from Chinese companies in its oil sector. While China National Petroleum Corporation halted operations in Venezuela in 2019 due to the risk of US secondary sanctions, reports from August indicate that the smaller China Concord Resources Corp (CCRC) is investing one billion dollars in two Venezuelan oil fields. In May 2024, CCRC signed a twenty-year shared production agreement, aiming to produce sixty thousand barrels per day by the end of 2026. Under this deal, lighter crude will be supplied to PDVSA, while heavier crude will be exported to China. 

This development carries two major implications. First, it challenges the strategic framework through which the United States has traditionally approached sanctions on Venezuela. Washington has long operated under the assumption that escalating sanctions on Venezuela’s oil sector would deter foreign companies from operating there due to the risk of secondary sanctions—and, until now, that assumption has largely held. A twenty-year production agreement with a smaller Chinese firm, however, suggests that Beijing may no longer be willing to adjust its trade and investment decisions in Venezuela according to US sanctions.

Second, if CCRC can indeed raise production to the stated levels and deliver half of the output to Venezuelan authorities, restricting the Maduro regime’s access to cryptocurrencies may become the only remaining lever to curb its oil revenues. That said, CCRC has no prior drilling experience, underscoring the need for caution and close monitoring of whether it can realistically meet its production targets.

What should the US do next

Recent reporting by Reuters and the New York Times indicates that sanctioned entities—including PDVSA—are now using crypto to receive oil payments. To ensure the Maduro regime is not using cryptocurrencies to undermine the Trump administration’s sanctions strategy, the US government, in coordination with partners and allies, should build out the intelligence picture regarding Venezuela’s use of stablecoins and other digital assets to evade sanctions. After identifying the key actors and wallets involved, the government can use targeted sanctions and law enforcement actions, consistent with past actions against Venezuelan oil-trade–related schemes. It should also share relevant information with private-sector partners, particularly stablecoin issuers and exchanges. The government should then request their cooperation on freezing wallets linked to sanctioned individuals, which issuers and exchanges have done before.

Understanding how to counter sanctions evasion through cryptocurrencies is critical—not only in the context of Venezuela, but for the overall integrity of US financial sanctions. Our Axis of Evasion research shows that sanctioned regimes often replicate one another’s tactics to bypass restrictions. With Russia’s oil giants Lukoil and Rosneft now under sanctions, Moscow is likely to adopt Venezuela’s approach of using stablecoins to facilitate oil payments from Chinese buyers. Developing a clear strategy for how US sanctions and law enforcement authorities address the use of dollar-pegged stablecoins and other cryptocurrencies is therefore essential. Doing so would not only disrupt Venezuela’s ongoing sanctions evasion efforts. It would also send a powerful signal to other heavily sanctioned countries that the United States will not tolerate the use of digital assets to undermine its sanctions regime. 

Maia Nikoladze is the associate director of the Economic Statecraft Initiative at the Atlantic Council’s GeoEconomics Center.

Energy Sanctions Dashboard

This dashboard focuses on US sanctions and restrictive measures placed on crude oil from Russia, Iran, and Venezuela—including the unintended consequences and the lessons learned.

The post How Venezuela uses crypto to sell oil—and what the US should do about it appeared first on Atlantic Council.

On November 8, Mercedes Sappuppo, nonresident fellow at the Atlantic Council’s Eurasia Center, was quoted in Kyiv Post on the one-year exemption for Hungarian imports of Russian gas.

Fellow

Mercedes Sapuppo

Nonresident Fellow

Eurasia Center

Belarus Civil Society

The post Sapuppo in Kyiv Post on Hungarian exemption from US sanctions targeting Russian energy appeared first on Atlantic Council.

The decision to impose a complete ban on Russian gas is the latest stage in ongoing efforts to exclude the Kremlin from European energy markets. Since Russia began its full-scale invasion of Ukraine in February 2022, Moscow has lost nearly 80 percent of its European market share after curtailing supplies to undermine Western support for Ukraine. Even so, Russia has earned no less than €215 billion during the wartime period through the reduced but ongoing sale of gas to some EU clients.

EU policymakers now say European consumers can no longer bankroll Russia’s war budget. The move is timely because Europe could soon benefit from an abundance of liquefied natural gas (LNG) as the United States and Qatar are set to double their production in the upcoming years. However, there are still many challenges and possible loopholes that could stymie the process.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

A number of legislative complexities will need to be addressed during negotiations to determine the final version of the ban, with talks expected to continue into next year. The European Commission published the first draft of the phaseout roadmap for imports of Russian pipeline and liquefied natural gas during summer 2025. The document stipulated that short-term contracts of less than a year would be discontinued in 2026, while longer-term contracts would be terminated by January 2028.

The draft proposal raised some eyebrows, particularly due to the introduction of an article suggesting that the ban could be temporarily lifted in case of market emergencies. Contrary to expectations, the clause was not pushed through by Hungary and Slovakia, the EU’s most Kremlin-friendly Russian gas buyers. Instead, it was introduced under pressure from Spain, where several companies still hold long-term LNG import contracts with Russian producers.

The text has been reviewed by both the European Parliament and the Council of Ministers, with the former pushing for even more ambitious terms. For example, MEPs would like to see all imports terminated by 2027, a year earlier than initially stated by the European Commission. They also insist on closing loopholes by targeting circumvention risks.

The draft version adopted by the Council of Ministers aligns to a large degree with the version circulated by the European Commission and continues to include an emergency brake. The final text will have to be negotiated as part of talks involving the European Parliament, Council of Ministers, and European Commission.

To further complicate matters, the EU recently adopted its nineteenth Russian sanctions package, which includes a ban on Russian LNG imports from 2027, a year earlier than the deadline proposed by the EU’s own phaseout roadmap. This fast-tracked LNG ban was likely introduced in response to pressure from US President Donald Trump, who has singled out Europe for continuing to buy Russian fossil fuels.

While this sanctions-mandated ban may lead to an earlier block on Russian LNG exports, many observers fear that it is insufficiently robust and could be overturned, since EU sanctions are up for review every six months and require unanimous backing in order to be extended. This means the fast-tracked LNG ban could be vulnerable to opposition from any individual EU member.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

While the legislative path toward a full EU ban on Russian gas imports remains long and complex, enforcement may prove even more difficult. The ban enjoys strong political backing across Europe, but there are widespread concerns that the Kremlin will try to identify potential loopholes to evade the ban.

Russian gas is currently exported to Europe via the Black Sea and Turkey, using a dedicated pipeline transporting the gas to the Balkans and Hungary. The EU has included this entry point in legislation and notes that flows must stop from 2028, but Russian gas arriving in Turkey via an interconnection point nearby could be relabelled and sold under a different name. The risk of relabelling Russian gas also extends to the entire bloc because there are still a number of companies with large import portfolios which hold long-term LNG contracts with Russian producers.

Regulations related to the enforcement of the EU ban, including penalties for potential breaches, will need to be reviewed and tightened up. Existing EU proposals may not be sufficient, while it is still unclear how violations will be penalised. This must be addressed in order to deter non-compliance.

EU officials are well aware that Moscow will fight efforts to exclude it from lucrative European markets. Deprived of fossil fuel revenue and with its economy facing mounting difficulties, the Kremlin will seek any opportunity to continue selling oil and gas to Europe. Allowing loopholes to remain could create large grey areas in European energy markets that would fuel Russia’s war in Ukraine and allow the Kremlin to retain leverage over Europe.

Dr. Aura Sabadus is a senior energy journalist who writes about Eastern Europe, Turkey, and Ukraine for Independent Commodity Intelligence Services (ICIS), a London-based global energy and petrochemicals news and market data provider. Her views are her own.

Further reading

UkraineAlert Oct 23, 2025

Russia’s ‘human safari’ in southern Ukraine is a warning to the world

By Oleksandr Tolokonnikov

Russia’s escalating campaign of drone attacks on the civilian population of Ukraine’s Kherson region highlights the destructive power of modern drone technologies, writes Oleksandr Tolokonnikov.

Conflict Defense Industry

UkraineAlert Oct 9, 2025

Putin the geopolitical gangster is trying to intimidate Europe

By Peter Dickinson

Putin the geopolitical gangster is trying to intimidate Europe into abandoning Ukraine with an escalating campaign of gray zone aggression designed to highlight the continent’s vulnerability to Russian attack, writes Peter Dickinson.

Conflict Drones

UkraineAlert Oct 2, 2025

Drone superpower Ukraine is teaching NATO how to defend against Russia

By David Kirichenko

Ukraine’s unrivaled experience of drone warfare makes it a key partner for NATO and an indispensable ally in the defense of Europe as the continent faces up to the mounting threat posed by an expansionist Russia, writes David Kirichenko.

Conflict Defense Technologies

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Europe finally moves to ban Russian gas but potential loopholes remain appeared first on Atlantic Council.

The timing of this sudden activity is no coincidence. Iraqi Prime Minister Mohammed Shia al-Sudani has discovered what the Kurdistan Regional Government (KRG) learned long ago: Oil and gas deals buy political influence in Washington. He is also hoping that the new deals will buy him US backing for a second term. Thus, at least in part, the latest activity reflects a calculated political dance between Baghdad and Washington.

But it is unclear whether this strategy will bear lasting fruit for either al-Sudani or the oil companies—largely because everything will depend on the outcome of Iraq’s upcoming elections and the messy government formation that will follow. As such, the surge in US company interest represents both opportunity and risk in a country where political calculations can override commercial logic overnight.

Why US firms are suddenly interested

The commercial logic for the companies themselves is straightforward. Iraq offers some of the world’s cheapest-to-produce oil, on a scale that matters to the biggest international oil companies. Few places can match Iraq’s combination of low extraction costs and massive reserves. For companies facing depletion elsewhere and needing to build long-term supply, Iraq represents one of the last great opportunities.

ExxonMobil and Chevron have an additional motivation, as they seek insurance against potential problems in Kazakhstan—where their operations represent sizeable assets for both firms. The current government there is seeking to modify contracts to secure more revenues for the state, and if ExxonMobil’s or Chevron’s ventures in Kazakhstan do face difficulties, Iraqi production could provide crucial backup.

But what has really changed the game in Iraq for US firms is the new contracts on offer. The old technical service agreements first introduced by Iraq’s oil ministry in 2009—with their per-barrel fees and limited upside—drove away many US investors, including Chevron, which many in the oil industry had regarded as the partner of choice in postwar Iraq. The recent deals signed by the US firms are different. Companies negotiated directly with Iraq’s oil ministry based on a contractual formula that offers the firms a larger share of overall profits and grants them access to physical barrels of crude that they can trade to their advantage. These are not just better terms; they are fundamentally different agreements that will improve the oil companies’ bottom line.

Baghdad’s political calculus

Commercial considerations only tell half the story. Al-Sudani’s rush to sign deals with US firms over the past few months is fundamentally about political survival, both his own and Iraq’s.

Energy deals, beginning with earlier agreements inked with TotalEnergies in 2023 and BP* in 2024, have been an important element of the prime minister’s ambitious capital investment agenda, which he has used to project the image of an effective administrator among Iraqis as he pushes for a second term in office. With elections fast approaching, he needs more wins to maintain his political momentum, which he hopes to turn into votes.

Al-Sudani’s emphasis on building partnerships with US firms also reveals deeper anxieties. Rising tensions with Washington since the summer over Iraq’s long-standing economic, political, and security ties to Iran—including allegations that Iraqi groups were smuggling Iranian crude—have sparked genuine fear in Baghdad about potential sanctions on Iraq’s oil industry (the country’s economic lifeline and a major supplier to global oil markets). The Iraqi government also fears that Israeli military strikes against Iran-supported Islamist Shia militias in Iraq remain a possibility and that only the United States can keep Israel at bay. Consequently, the prime minister has sought to appeal to US President Donald Trump’s transactional instincts by delivering what his administration often values most: commercial opportunities for US companies.

The strategy is borrowed directly from the KRG’s playbook. For years, the KRG has parlayed relatively minor energy deals to bolster its already outsized political influence in Washington. Al-Sudani is attempting the same maneuver on a grander scale, using major oil contracts as both shield and sword—protection against US economic punishment and leverage for political support. His calculation appears to be that US companies with billions at stake will become important de facto lobbyists for Baghdad in Washington, arguing against policies that might destabilize their investments.

So far, the results of this strategy have been mixed. While the Trump administration has not imposed the harshest measures al-Sudani feared, such as sanctions on senior political figures or on officials in the State Oil Marketing Organization, Iraq has not escaped unscathed as Washington pushes Baghdad to disarm Iran-linked militias. In its latest sanctions move, the US Treasury earlier this month targeted an Iraqi state firm for the first time (al-Muhandis General Company), which Washington alleges is associated with the US-designated group Kataib Hezbollah. The move was a stinging rebuke to al-Sudani, and it embarrassed him domestically in light of his efforts to court the Trump administration. The complicated political and security relationship between the Iran-linked militias and the Iraqi government makes disbanding the armed groups unlikely in the short term, which in turn could lead to more punitive measures if Iraq and Iran hawks in Washington get their way. The oil card, it seems, only buys so much protection.

The election wild card

The upcoming elections in November, and the government-formation circus that is expected to follow, could further complicate things for US investors. Indeed, Iraq’s attractiveness could quickly diminish depending on the outcome.

Al-Sudani’s alliance is favored to win a simple majority, and he is campaigning hard on promises to accelerate his national investment program. Behind closed doors, my sources in Iraq also argue that only he can manage the relationship with Washington. Given his track record so far, a second al-Sudani term would likely mean continued momentum for US investment and perhaps even better terms for US investors.

But Iraqi politics rarely follow simple scripts. Government formation traditionally takes months of horse-trading, as all of Iraq’s major parties seek to reach consensus on powersharing and appointments, paralyzing decision-making in the interim. More importantly, the main Shia Islamist factions—who ultimately choose the prime minister—mostly want al-Sudani gone. It is quietly understood that al-Sudani’s rivals see him as too independent, too powerful, and therefore as a potential threat to their parochial interests and patronage networks. Al-Sudani’s success in centralizing decision-making, and his domestic popularity, have made him dangerous in their eyes. Washington also seems lukewarm about him, despite his commercial overtures, viewing him as too willing to accommodate Iranian interests when necessary.

The electoral math is crucial. Iraqi politics is not about simple majorities but intra-sectarian dynamics. Al-Sudani needs to win not just an incontrovertible majority of “Shia” seats but the right Shia political configuration as well. If al-Sudani fails to win the majority he needs, and his rivals among the established Islamist Shia parties unite against him, a simple majority will not matter. He will be pushed aside in favor of a more pliable and less dangerous alternative.

Al-Sudani’s departure will not necessarily end efforts to attract US investment, but it will remove the most administratively effective post-2003 Iraqi premier. Through personal oversight and a strengthened prime minister’s office, al-Sudani has fast-tracked negotiations with US firms and pushed deals to completion and implementation in ways his predecessors—including previous US favorites—never managed.

This effectiveness is precisely what his rivals fear and want to eliminate. The risk for US companies is getting a new prime minister who embodies the administrative ineffectiveness of past Iraqi leaders, resurrecting the bureaucratic problems that drove many of these same firms away before. Without Sudani’s administrative experience, centralized authority, and political will to push things through, Iraq’s energy bureaucracy risks reverting to its natural state: gridlock punctuated by occasional decision-making.

The bigger picture

Even with increased US investment, Baghdad may find itself at odds with the Trump administration. US strategic interest in Iraq continues to diminish. If oil deals no longer provide political protection, Baghdad’s incentive to prioritize US companies diminishes. Worse, if Washington perceives that the new government in Baghdad is tilting more towards Iran—or even that it simply has the wrong factional balance—the United States could trigger some of the very sanctions al-Sudani has worked to avoid.

If relations do sour, US firms could pay a price. Investment opportunities are not just carrots for Baghdad to offer Washington; they can also become sticks to signal displeasure. While the United States holds most of the leverage, Iraq has shown it is willing to play this game when pushed.

The fundamental reality is that above-ground factors—politics, personalities, and US-Iraq relations—will continue to matter more than geology or commercial terms for US firms in Iraq. Al-Sudani has created a window of opportunity, but windows in Iraq have a habit of slamming shut unexpectedly.

US energy companies returning to Iraq are betting that political winds will remain favorable. They may even be banking on al-Sudani’s survival, continued accommodation between Baghdad and Washington, and their ability to navigate Iraq’s fractious politics. It is a gamble because the next phase of Iraqi politics is uncertain, and elections throw up surprises. The question is not whether Iraq offers attractive opportunities (it does), but rather how the political risks unfold to shape the investment environment.

So, for now, US firms are back in Iraq. Whether their outlook is as propitious a year from now depends entirely on how Iraq’s political drama develops.

Raad Alkadiri is managing partner at 3TEN32 Associates, an international advisory group that assists corporations and governments in navigating the complex political, economic, and social trends that shape the energy sector. Its clients include BP.

The post US energy firms are returning to Iraq—but politics could undo their fortunes appeared first on Atlantic Council.

The post Taylor quoted in the Kurdistan Chronicle on Kurdistan’s natural gas reserves appeared first on Atlantic Council.

The post American University energy event mentioned in Shams TV on the Iraq electricity crisis appeared first on Atlantic Council.

“It was time,” President Donald Trump said on Wednesday as he announced that the United States was ratcheting up sanctions on Russia. The new measures—the first such action against Russia in Trump’s second term—target Russian energy giants Rosneft and Lukoil, as well as more than thirty subsidiaries. The sanctions come as US-led efforts to end Russia’s war in Ukraine have stalled, with a proposed meeting between Russian President Vladimir Putin and Trump in Budapest now cancelled. How much of a punch do the new sanctions pack? How might Moscow respond? Atlantic Council experts answer below. 

• Daniel Fried (@AmbDanFried): Weiser Family distinguished fellow and former US assistant secretary of state for Europe 
• John E. Herbst (@JohnEdHerbst): Senior director of the Eurasia Center and former US ambassador to Ukraine
• Kimberly Donovan: (@KDonovan_AC): Director of the Economic Statecraft Initiative within the GeoEconomics Center and former White House and Treasury official 

Why now?

• “This is the first time the Trump administration has imposed any new financial restrictions on Russia,” in this term, Dan tells us. This action came “after Putin stonewalled on a cease-fire and patronized Trump” during a call between the two leaders last week. 
• “Today’s move is a welcome warning shot to Putin to knock off the games and maximalism and get serious about ending the war,” says Dan. 
• And yet, John warns, “Putin still thinks that he can outlast any Western leader in pursuing his war of conquest.”

Sign up to receive rapid insight in your inbox from Atlantic Council experts on global events as they unfold.

What’s the impact?

• Kim predicts a “direct and immediate impact on Russia’s oil profits,” both from legal sales and those via the Kremlin’s price cap-busting shadow fleet.  
• The primary sanctions against Rosneft and Lukoil, Kim notes, were pursuant to Executive Order 14024, which she says is significant because it “carries the threat of secondary sanctions on foreign financial institutions that continue to do business with the sanctioned companies.” 
• But these sanctions are “not a maximal blow,” says Dan. Tougher US actions, he adds, could include “joining Europe in lowering the price cap on Russian oil, enforcing the oil price cap by putting sanctions on the Russian shadow fleet of tankers,” and sanctioning ports that service them. 
• Nevertheless, Dan says the sanctions are “a strong move.” He explains that they could “put even more downward pressure on Russian oil revenues” by forcing Moscow to further discount its oil and “forcing purchasers to consider alternative sources of oil.”  

What’s next?

• Kim notes that the US Treasury Department also issued a general license on Wednesday that will “allow for a wind down of transactions with Rosneft and Lukoil, which expires on November 21.” This window, she says should give countries that purchase large amounts of Russian oil, such as China and India, “time to decide if they will stop importing Russian oil or face the threat of secondary sanctions by the United States.” 
• Going forward, says Kim, the United States should continue aligning sanctions policy with the United Kingdom and the European Union. (Though the latter has not yet sanctioned Lukoil.) Such alignment and “consistent enforcement,” she writes, “will ensure these actions achieve the desired result and get Putin to negotiate an end to this bloody war.” 
• To achieve his goal of ending the war, Trump should “prepare for a monthslong ratcheting up of pressure on Moscow,” says John. “At the moment, all Putin sees for sure is another round of sanctions. It must not be the last round.”  
• The United States, “also needs to do more on the military side,” John argues. Even if the Trump administration does not want to give Tomahawk missiles to Ukraine now, John asks: “Why repeat the Biden tactic of ruling out measures that make the Kremlin nervous?” 
• “Trump can only achieve a durable peace,” says John, “if he persuades Putin that the United States and its allies will arm Ukraine to the point that further Russian military gains are not possible.” 

The post How will Trump’s new Russian oil sanctions shift the war? appeared first on Atlantic Council.

Serbia’s energy lifeline is now under US sanctions after 8 months of postponements. Washington has targeted NIS, Serbia’s main oil company, majority-owned by Russia’s Gazprom Neft, striking at the core of Belgrade’s energy system and its fragile balance between Moscow and Brussels.

With 80% of Serbia’s fuel supply flowing through NIS, the sanctions raise urgent questions:

• Will Russia sell its stake in Serbia’s oil giant?
• Could Western or regional buyers step in?
• And how will this reshape Belgrade’s geopolitical balancing act between East and West?

In this episode of #BalkansDebrief, Ilva Tare, Europe Center Senior Fellow, speaks with Dr. Igor Novaković, Senior Associate at the International and Security Affairs Centre, ISAC Fund, to unpack what these sanctions mean for Serbia’s energy security, its economy, and its future in Europe’s political orbit.

From the refinery to the corridors of Brussels and Moscow, this is a story about power, dependency, and the price of neutrality in a region caught between competing global interests.

#BalkansDebrief is an online interview series presented by the Atlantic Council’s Europe Center and hosted by journalist Ilva Tare. The program offers a fresh look at the Western Balkans and examines the region’s people, culture, challenges, and opportunities.

Watch #BalkansDebrief on YouTube and listen to it as a Podcast.

Fellow

Ilva Tare

Resident Senior Fellow

Europe Center

Albanian English

The Europe Center promotes leadership, strategies, and analysis to ensure a strong, ambitious, and forward-looking transatlantic relationship.

Learn more

The post Can Serbia survive US sanctions on Russian oil? | A Debrief with Igor Novaković appeared first on Atlantic Council.

This is not the first time since the start of the full-scale invasion that Russia has faced major budgetary strains. In 2022, the Kremlin’s urgent need to cover rising military expenditures forced it to resort to improvised measures such as windfall taxes on the energy and banking sectors. A surge in commodity prices then helped cover Russia’s ballooning defense budget, while mobilization and additional recruitment in 2023 and 2024 were financed mainly through municipal and regional budgets, along with minor tax hikes.

For much of the past three and a half years, international attention has focused on Russia’s apparent success in overcoming the impact of sanctions, along with the Kremlin’s ability to maintain modest GDP growth while transitioning to wartime conditions. However, the economic strain of the ongoing invasion is now becoming increasingly hard to disguise.

Russia’s deepening economic difficulties have been exacerbated by a highly effective Ukrainian campaign of long-range air strikes targeting the oil and gas industry that fuels Putin’s war machine. Since August 2025, Ukraine has launched a large-scale air offensive against oil refineries, gas processing plants, fuel depots, pipelines, logistics hubs, and export terminals across the Russian Federation. This has contributed to a sharp drop in Russian energy export revenues and led to spikes in fuel prices for domestic consumers. In recent months, fuel shortages have been reported in regions throughout Russia, with car owners forced to queue for hours in search of limited supplies.

The current fuel crisis in Russia is unlikely to be resolved soon. In a recent assessment, the Paris-based International Energy Agency stated that the impact from Ukrainian drone strikes is expected to suppress refinery processing rates for Russia’s economically crucial oil industry until at least mid-2026. Ukrainian strikes are also continuing to gain pace, with Kyiv in the process of developing a new generation of domestically produced missiles that should enable a further escalation in the bombing campaign.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

To cover the growing gaps in the Russian budget and continue funding the war, the Kremlin plans to hike the country’s VAT rate from 20 to 22 percent. Tax increases are also expected to impact entrepreneurs, as the threshold for Russia’s simplified system with lower rates is set to be reduced fourfold. Critics have characterized this strategy as redirecting money away from ordinary Russian citizens and private businesses in order to finance the invasion of Ukraine.

Russia’s deteriorating economic situation places the Kremlin in a difficult position. On the one hand, a combination of sustained Western support for Ukraine and funding issues in Moscow mean that the Russian military could soon face increasing difficulties on the battlefield. On the other hand, the longer the fighting drags on, the more Russia’s economy is likely to suffer. Meanwhile, further sanctions measures and Ukrainian strikes on Russia’s energy industry are creating new pressure points that risk fueling domestic discontent inside Russia.

With relatively little movement along the military front lines in Ukraine over the past two years, the economic front of the war may ultimately prove decisive. “Putin will only stop this war when he thinks he can’t win, and for him to come to that conclusion, there needs to be more pressure on the Russian economy and more help for the Ukrainians,” commented Polish Foreign Minister Radosław Sikorski in September. “The war will likely end the way World War I ended. One side or another will run out of resources to carry on.”

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

The objective in Western capitals must now be to make sure Russia runs out of resources before Ukraine. This should not be beyond the realms of possibility, given the vastly superior resources of Ukraine’s allies.

Russia’s current goal is to reduce its dependence on oil and gas. The planned Russian budget for 2026 is based on a lower oil price and aims to rely more on domestic taxes instead. Over time, this approach could make Russian state finances more resilient by cutting the share of oil and gas revenues from the current level of around 40 percent to about half that figure. But if Western countries tighten sanctions at the right moment, this plan could backfire, triggering runaway inflation and a further slowdown in Russian economic activity.

There are currently encouraging signs of Western readiness to increasingly target Putin’s war economy. Trump’s efforts to impose tariffs on countries that buy Russian oil have already made some nervous about trading with Moscow. The EU and UK have also stepped up sanctions, including blacklisting more ships from Russia’s shadow fleet. These measures are having an impact. For example, China’s Qingdao Port recently introduced technical restrictions on tankers that will effectively ban shadow fleet vessels, a move that underscores growing caution toward doing business with the Kremlin.

Ukraine’s deep strikes have exposed Putin’s Achilles heel and have helped demonstrate that the Russian economy is far more fragile than many in Moscow would like us to believe. Kyiv’s Western partners should now exploit their economic leverage over Russia in order to increase the pressure on Putin and convince the Kremlin that continuing the war could lead to economic ruin.

Vladyslav Davydov is an advisor to Ukraine’s First Deputy Minister for Development of Communities and Territories.

Further reading

UkraineAlert Sep 30, 2025

Putin’s dream of demilitarizing Ukraine has turned into his worst nightmare

By Peter Dickinson

Putin had hoped to demilitarize and decapitate the Ukrainian state, but his self-defeating invasion has inadvertently created the militarily powerful and fiercely independent Ukraine he feared most of all, writes Peter Dickinson.

Conflict Defense Technologies

UkraineAlert Oct 14, 2025

Russian strikes on Ukraine’s energy infrastructure are a European problem

By Aura Sabadus

Russia’s strikes on Ukrainian energy infrastructure are no longer just a Ukrainian problem. Moscow’s bombing campaign will become a wider European issue unless more support is offered to Kyiv, writes Aura Sabadus.

Conflict Drones

UkraineAlert Oct 16, 2025

Putin seeks more foreign fighters amid mounting Russian losses in Ukraine

By David Kirichenko

With fewer and fewer Russians ready to volunteer for the war in Ukraine, Putin is seeking to recruit more foreign fighters from across Africa, Asia, and beyond, writes David Kirichenko.

Africa Americas

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Vladimir Putin’s war machine may finally be running out of fuel appeared first on Atlantic Council.

While the Kremlin is understandably eager to conceal the scale of the damage caused by Ukraine’s energy sector attacks, there can be little question that the strikes conducted in recent months are bringing Putin’s invasion home to ordinary Russians. In early October, the Paris-based International Energy Agency downgraded its outlook for Russia and assessed that the impact from Ukrainian drone strikes will suppress Russia’s refinery processing rates until at least mid-2026. Meanwhile, car owners across Russia are being forced to queue for gasoline amid supply issues not witnessed since the dark days of the early 1990s.

The current wave of fuel shortages is undermining Kremlin efforts to shield the Russian population from the negative consequences of the war in Ukraine. Putin has been careful to limit the impact of the invasion on ordinary Russians, with military recruitment concentrated on disadvantaged regions of the country, prison populations, and financially motivated volunteers. This approach is very much in line with the unwritten ‘social contract’ that has evolved during the 25 years of Putin’s reign, whereby he offers the Russian public higher living standards in exchange for curtailed personal freedoms and political passivity.

The so-called social contract between Putin and the Russian population had already begun to unravel long before the present wave of Ukrainian attacks on Russia’s energy industry. Over the past three and a half years, the full-scale invasion of Ukraine has resulted in military losses unseen in Europe since World War II. At least one million Russians have been killed or wounded in the conflict, according to Britain’s Ministry of Defense and other international sources.

In parallel, economic growth in all but the defense sector has stagnated, with massive payments to military personnel deepening public dependency on the war. Throughout Russian society, policies of repression have reached unprecedented new levels as Putin has exploited wartime conditions to complete the country’s transition from flawed democracy to authoritarian dictatorship. Despite this deteriorating domestic situation, there is still no sign of any significant anti-war movement in today’s Russia.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

It is probably unrealistic to expect any Russian revolt over Putin’s breach of the social contract. This should not come as a surprise. While opinion polls have often indicated strong public support for the Putin regime, the Kremlin has always relied primarily on coercion rather than consensus. Throughout Putin’s reign, opposition figures have been exiled, imprisoned, or silenced, while the independent media has been muzzled and civil society suppressed. Following the onset of the full-scale invasion, these trends have all intensified. As a result, there is currently little prospect of any grassroots protests.

Opposition from within Russia’s elite looks equally unlikely. With the Russian economy increasingly on a war footing, the full-scale invasion is now a crucial factor determining the wealth and status of the country’s political and business establishment. With most members of the elite personally dependent on Putin and largely locked out of the Western world, the conditions for a Kremlin coup appear to be almost entirely absent. Instead, the invasion of Ukraine has allowed Putin to consolidate his grip on power and has forced those around him to draw closer to the throne.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

This does not mean that Ukraine’s current strategy of long-range strikes against the Russian energy sector is futile. Far from it, in fact. But with Putin firmly entrenched on the home front, only external pressures can realistically force him to abandon his invasion. Ukrainian attacks on Putin’s oil and gas industry are already having a significant impact on the Russian economy. If the current momentum can be maintained into 2026, the economic damage could become far more severe. This will curtail Moscow’s ability to finance and prosecute the war in Ukraine, while also negatively impacting many other aspects of Russian daily life.

Ukrainian efforts to push Putin to the negotiating table can only succeed with stronger Western support. Despite Russia’s claims of resilience, its economy remains heavily dependent on energy exports, with China and India the main clients. Effective Western action should include tightening sanctions on these buyers. Efforts must also continue to end all European purchases of Russian energy exports, either directly or via third parties. Additionally, Western leaders could help end the war by working to bring down global oil prices, thereby starving the Kremlin of much-needed export revenues.

Economic measures alone will not be enough. Military aid to Ukraine should also increase, with an emphasis on the provision of weapons systems capable of strengthening Ukraine’s domestic defenses while allowing Kyiv to expand attacks inside Russia. The objective should be to stabilize the front lines in Ukraine and protect Ukrainian cities from bombardment, while escalating the destruction of Russia’s war economy through a combination of air strikes and sanctions. If these goals can be achieved, Putin may finally be compelled to seek a settlement.

Christopher Isajiw is an international relations commentator and business development consultant to private, governmental, and non-governmental organizations.

Further reading

UkraineAlert Oct 8, 2025

Ukraine’s defense tech sector must guard against innovation drain

By Andriy Dovbenko

Without robust intellectual property (IP) protections, Ukraine may lose control of the defense tech innovations that are currently helping to defend the country on the battlefield, writes Andriy Dovbenko.

Conflict Defense Industry

UkraineAlert Sep 25, 2025

Trump called Russia a ‘paper tiger’ because he believes Putin is losing

By Peter Dickinson

US President Donald Trump now says Ukraine can defeat Russia. His dramatic change in tone reflects growing recognition that Putin’s invasion is not going according to the Kremlin plan, writes Peter Dickinson.

Conflict Disinformation

UkraineAlert Oct 14, 2025

Russian strikes on Ukraine’s energy infrastructure are a European problem

By Aura Sabadus

Russia’s strikes on Ukrainian energy infrastructure are no longer just a Ukrainian problem. Moscow’s bombing campaign will become a wider European issue unless more support is offered to Kyiv, writes Aura Sabadus.

Conflict Drones

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Ukraine’s drone sanctions are working but don’t expect a Russian revolt appeared first on Atlantic Council.

This is nothing new, of course. Since the start of the full-scale invasion, Russia has unleashed thousands of attacks on power lines, substations, pipelines, storage facilities, and processing plants as the Kremlin attempts to plunge Ukraine into darkness and cow the country into submission.

Russian attacks are now being conducted on an unprecedented scale. Targets are pounded by dozens of drones in one go, overwhelming Ukraine’s anti-missile systems. For example, in the early hours of October 9, Russia launched approximately 450 drones and 30 missiles at energy infrastructure, dwarfing the scale of attacks in previous years.

The coming winter is shaping up to be the harshest of the war for Ukraine’s civilian population. Kyiv Mayor Vitali Klitschko described the recent attack on the city’s electricity infrastructure as one of the most devastating since the start of Russia’s full-scale invasion. Meanwhile, officials at Ukraine’s state-owned energy giant Naftogaz say the latest Russian strikes have disabled 60 percent of the country’s gas production.

Ukraine has repeatedly demonstrated remarkable resilience, including in recent days as emergency crews worked to restore electricity to millions of people within hours of Russian strikes. Nevertheless, with the situation set to become more critical in the weeks and months to come, Ukraine’s allies need to consider decisive action.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

Russia’s strikes on Ukrainian energy infrastructure are no longer just a Ukrainian problem. Moscow’s bombing campaign will become a wider European issue unless more support is offered to Kyiv. The threat to European energy markets has been increasingly apparent throughout the current year. A number of Russian attacks on Ukrainian gas production assets in February 2025 led to severe imbalances, with a knock-on impact on most central and eastern European countries.

Between February and September, Ukraine bought close to five billion cubic meters of gas from European markets to plug the gap and prepare for winter, lifting regional demand and prices. If Russia continues its attacks this winter, the impact on Ukraine and the wider region promises to be even more dramatic. To prevent a regional deficit, all neighboring countries should therefore consider lifting existing restrictions on exports to Ukraine.

Europe has options to improve the energy outlook for Ukraine, but this will require quick political decisions. Global supplies of liquefied natural gas are set to rise in the coming months thanks to a surge in production, primarily in the US. While most western European countries will benefit from these additional imports because they have access to sea terminals and functional markets, consumers further to the east are less privileged as most are landlocked or have regional transmission capacity that is either congested or too expensive to use.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

Restrictions on energy logistics networks are having a direct impact on Ukraine. Despite sharing borders with four EU countries, Kyiv has been relying mostly on Poland and Hungary to secure imports and offset the domestic deficit caused by Russian attacks. Although Slovakia could offer ample transmission capacity, most of which is now idle because the country no longer transits Russian gas, its transmission tariffs are prohibitively expensive, limiting Ukraine’s ability to import gas from western Europe.

To compound matters, tariffs could increase by a further 70 percent in January 2026 if a planned hike is approved before the end of the year. Meanwhile, neighboring Romania has no less than four border interconnectors with Ukraine. However, its gas grid operator, Transgaz, allows gas to be shipped only on one of these at less than full capacity.

Romania has significant gas production but currently bans exports to Ukraine, quoting technical differences in gas quality in the two countries. Transgaz also charges some of the most expensive transmission tariffs in the region, which means that even countries which would like to ship gas to Ukraine via Romania may be discouraged from doing so.

Keeping tariffs high or blocking infrastructure is not only bad news for Ukraine. It also poses risks to the entire region, including consumers in Romania and Slovakia, because any congestion creates artificial deficits which lead to higher prices. EU and US policymakers understand the extent of the problem and privately admit that even their own interests may be impacted. For example, blocked capacity could also limit the ability of US companies to sell LNG to clients across central and eastern Europe.

Discussions are ongoing but the clock is ticking. As winter approaches, it is now more pressing than ever for Brussels and Washington to convince countries such as Slovakia and Romania to cooperate.

In an ideal scenario, Western allies would consider radical measures such as establishing a no-fly zone over parts of Ukraine with NATO aircraft patrolling its skies and protecting its people and civilian infrastructure. However, as NATO members remain deeply reluctant to risk a direct clash with the Kremlin, the next best option is to persuade Ukraine’s neighbors to put narrow national interests aside and take concrete steps to support Kyiv.

Dr. Aura Sabadus is a senior energy journalist who writes about Eastern Europe, Turkey, and Ukraine for Independent Commodity Intelligence Services (ICIS), a London-based global energy and petrochemicals news and market data provider. Her views are her own.

Further reading

UkraineAlert Oct 9, 2025

Putin the geopolitical gangster is trying to intimidate Europe

By Peter Dickinson

Putin the geopolitical gangster is trying to intimidate Europe into abandoning Ukraine with an escalating campaign of gray zone aggression designed to highlight the continent’s vulnerability to Russian attack, writes Peter Dickinson.

Conflict Drones

UkraineAlert Oct 8, 2025

Ukraine’s defense tech sector must guard against innovation drain

By Andriy Dovbenko

Without robust intellectual property (IP) protections, Ukraine may lose control of the defense tech innovations that are currently helping to defend the country on the battlefield, writes Andriy Dovbenko.

Conflict Defense Industry

UkraineAlert Oct 6, 2025

Putin rejected Trump’s generous deal. Time to try peace through strength.

By Sergiy Solodkyy

President Trump’s efforts to end the war in Ukraine by offering Putin Kremlin-friendly peace terms have failed to convince the Russian dictator. It is now time to speak to Putin in the language of strength, the only language he truly understands, writes Sergiy Solodkyy.

Conflict Peacekeeping and Peacebuilding

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Russian strikes on Ukraine’s energy infrastructure are a European problem appeared first on Atlantic Council.

Flagship Event Mon, September 29, 2025 • 6:30 am ET

2025 Transatlantic Forum on GeoEconomics

The Transatlantic Forum on GeoEconomics is an annual conference convening economic and financial leaders from both sides of the Atlantic.

Digital Policy Economy & Business Europe & Eurasia European Union

Event transcript

Uncorrected transcript: Check against delivery

MATTHEW WHITAKER: Good morning, Fred.

FREDERICK KEMPE: Good morning, Ambassador. How are you?

MATTHEW WHITAKER: Well, they said a fireside chat. There’s no fire, so I’m a little disappointed.

FREDERICK KEMPE: I always take that out of my notes because a fireside chat is a—you know, it’s until we get to December, January, February I think we don’t need that.

But what a pleasure to start the day with you—Matthew Whitaker, the United States permanent representative to NATO. And you got off to what I would say is just a tremendous start with the summit in The Hague: A 5 percent defense commitment from all the allies. Nobody could have imagined that: 3.5 percent core, 1.5 percent beyond that. It’s great to have you here kicking us off.

As Julia said, we always put together the notion that you cannot separate security and you can’t separate prosperity. And so one of the questions behind this that we’ll talk about during the course of the day is Europe can’t afford not to pay for its own defense, but cannot afford to pay for its own defense. That’s one question.

But let’s start a little bit with a very brief introduction. We don’t have much time, so I don’t want to go through your entire CV. But Ambassador Whitaker has been President Trump’s envoy to NATO since April. As I said, he’s already made his mark in the summit in June. Most notably from that summit, the ambassador himself labeled it one of the most consequential moments in this alliance’s history. And it could be that if this could now be delivered on.

So maybe that’s where I’ll start. You’ve got threats to Europe’s security becoming frequent and dangerous. Just this month, Russia violated airspace—Poland, Romania, Estonia. This week’s Russian attacks on Ukraine are some of the fiercest we’ve had since the war began in February 2022. What are you looking at? In this context, with the decisions made in the NATO summit, how are you going to measure success? How are you going to see if everything that people have agreed to is actually producing real results?

MATTHEW WHITAKER: Yeah, great question. And thanks, Fred. I appreciate the invitation and, obviously, we could speak probably for all morning on the topics that right now we’re dealing with at NATO. And I want to appreciate, you know, your Atlantic Council, your Europe Center, and Atlantik-Brücke for hosting this important forum. The topics are very timely, and appropriate to be here in Brussels.

You know, the United States, as I say everywhere I go, remains committed to NATO and to defending every inch of NATO territory. But there are still issues to address, including the big one, defense spending, and obviously the resolution of the war in Ukraine. The United States expects European NATO allies to meet their defense commitments and the spending target of 5 percent, which you mentioned is 3.5 percent on NATO capability targets and another 1.5 percent on defense-related spending like enablement, dual-purpose infrastructure, and the like.

And these investments I think really get to the heart of the capabilities, security, stability, and quite frankly the credibility of NATO. When allies contribute their fair share towards the conventional defense of Europe, we strengthen deterrence and allow the United States to prioritize its own strategic resources while reinforcing regional and global security. And the Hague defense commitment was a good start, but unfortunately I think some of our allies are dragging their feet, and they need to pick up the pace. And you know, we need real year-over-year growth in every country’s defense spending, not just some defense spending in countries.

If every ally lives up to their Article 3 obligation, which says they will invest in their individual and therefore the collective defense, we’ll drive innovation and modernization across the alliance—two big things that I’m working on on a daily basis—and ensure that our forces are prepared for the evolving threats that we see changing every day, whether it’s in cyber, space, and really across all domains. And shared investment and collective defense investment in modern, interoperable forces—another keyword here in Europe, because there is still not 100 percent interoperability among all of our armed forces—will ensure that Europe and the United States can work seamlessly together. It strengthens our collective security, balances burden-sharing, and builds a credible deterrent that protects both European and American citizens, and Canadian citizens.

In an uncertain world, we can only have peace through strength. And this—I talk about this so much, Fred, how the strength of NATO, and if all thirty-two allies—if the whole team is strong and there’s no weak link, then that strength is what’s going to ensure peace and no one will challenge that strength.

And we all know that Russia is the greatest threat to peace in the transatlantic area. And if allies are serious about bringing peace to Ukraine, they need to starve the Russian war machine and stop purchasing Russian energy. Once they do that, obviously, there’s a clear path to additional US and European sanctions to impose even more costs and change the calculation for the Russians to come to the negotiating table and resolve this completely unnecessary and just meat-grinder of a war. And quite frankly, the ball is in the court of the European and Canadian allies. They need to start—every single ally needs to start spending money on their defense and stop buying Russian energy.

And you know, this conversation is something I’ve been looking forward to, Fred, for—since it got on my calendar, and I really appreciate the time. But I just want to emphasize that we are—everyone made the commitment in The Hague. Everyone knows 5 percent is our North Star. Everyone knows that every year we have to get year-over-year growth. And the challenge now is to make sure that everyone is moving at pace to the—at the speed of relevance to make sure that we can meet these commitments and, therefore, have that strength that’s going to guarantee the peace.

FREDERICK KEMPE: Thank you, Ambassador.

So let me come back to the defense spending and sort of the challenge for Europe. But let me first hit on something in your—in your opening comment, which is a clear path to sanctions; stop purchasing Russian energy. There’s a NATO bill—sorry, sanctions bill in the Senate, I think eighty-four Senate sponsors, waiting to go through. Are you saying and is the president saying that until Europe does more in terms of stopping its gas purchases, oil purchases from Russia, that these sanctions—the US sanctions won’t move forward?

MATTHEW WHITAKER: Yeah, I think President Trump has looked at the entire horizon of this and has said, you know, what are we doing? If we’re—if we’re still giving European money to Russia to buy energy, you know, sanctions aren’t going to ultimately have as much bite. And so, you know, if you look at countries like Poland, Czech Republic, completely weaned themselves off of Russian oil and gas. We have other NATO alliance members that are buying almost a hundred percent of their oil and gas—specifically, Hungary, Slovakia—and not a hundred percent, but Turkey still is buying too much Russian energy. And these are conversations that we’re having as the United States with our allies and together through NATO as to how we also wean those folks off.

Now, obviously, this is not going to be easy. You know, two of those countries have direct pipelines from Russia—bringing them, you know, cheaper oil than they can buy on the—on the market, and so it’s not going to be easy. But it also—you know, as I go to these conferences, one of the things I hear are people on the stage say, oh, this is going to be hard; you know, this is a hard issue, or—but that’s—we have to do these hard things. This is—this is what’s actually going to bring this environment of peace and prosperity for all of our citizens, all one billion—approximately—citizens that, you know, are in NATO territories, in the thirty-two countries.

And so I keep working really hard. You know, I’ve had some very good conversations both with the United States government and people like Doug Burgum and Chris Wright, our energy secretary and our interior secretary, and then also with our allies to—like, we got—this is going to be hard, I know, but we have to do it. And that’s how NATO not only is relevant in things other than just the security of Europe and the transatlantic region, but also how it’s relevant to solving the war in Ukraine and—you know, and moving forward to a new moment in world history.

FREDERICK KEMPE: I’m so glad you said it that way, a new moment in world history. Ursula von der Leyen, the president of the Commission, gave a State of the European Union which was really powerful, and her quote was Europe is in a fight: “A fight for a continent that is whole and at peace. For a free and independent Europe.” Interesting, used that word. “A fight for our values and our democracies. A fight for our liberty and our ability to determine our destiny for ourselves. Make no mistake—this is a fight for our future.”

You know, I’ve been watching Europe for a long time, and it feels as though that’s true. And the two sides of this that we’re talking about at this conference are security and competitiveness. Can you talk about the interlinkages between that? Because one of my questions over time is whether Europe’s going to be able to afford—it can’t afford not to pay for its defense, but will it be able to afford to pay for its defense? Will it not have to take from the welfare state? Will it not have to innovate more and grow more to be able to do this? How do you look at those interlinkages between Europe’s economic health and ability to defend itself?

MATTHEW WHITAKER: Well, they’re directly related. I mean, it is—this is something you’re not going to be able to borrow your way to, you know, security, because at the end of the day you can buy tanks and you can buy artillery and you can buy planes—prefer you buy F-35s—but all of those need to be sustained and repaired and fixed. And you know, that oftentimes is as expensive in the long term as the initial purchase. And so we have to figure out how to get the European economy on better, more solid footing.

And a lot of it is the United States has a culture of innovation and entrepreneurship. I mean, we just—it’s built into our DNA. A lot of it was inherited from the immigrants that came from Europe originally, whether from—you know, whether Dutch or German or, you know, every other, you know, country and creed. But ultimately, for some reason Europe has taken a no approach and the United States has taken a yes approach when it comes to innovation and entrepreneurship. You know, we have—we have created a culture in the United States where somebody can take risk, and if they take risk and they—and they succeed then they’ll be rewarded for that. And I think oftentimes in Europe it’s backwards, where there is a—there’s a—the government is skeptical on new ideas and innovation and innovators. And that’s something that’s going to have to change.

And, obviously, the social safety net is—you know, instead of a hand up, it’s a hammock, where I think there is a very comfortable life for, you know, a lot of countries and their citizens. And I look at, you know—you know, I know the American work ethic is inconsistent. There are some of us that work very hard; there’s some that—you know, that don’t. But certainly, a work week for us is at least forty hours and oftentimes, you know, for a lot of people it’s fifty or sixty hours a week. And in places like, you know, Belgium, it’s thirty-six hours and with downward pressure on the number of hours. And I think that’s—you know, that whole culture is going to have to grow and develop because fundamentally you can’t pay 5 percent of your GDP on defense and defense-related items without economic growth—

FREDERICK KEMPE: Right.

MATTHEW WHITAKER: —because, you know, you can’t grow your government budget. And there’s only two ways. You can get it through economic growth, and therefore more revenue under your current tax system; or you can get it, you know, by raising taxes. And that certainly is not popular here in Europe or in North America either.

FREDERICK KEMPE: And as you’ve talked to your allies, how do they feel about—you were talking again in your opening comment about some dragging their feet. Do you feel the energy after the summit declarations is there toward meeting these goals, toward making the changes that are needed? Does Europe understand what a big moment it is for Europe?

MATTHEW WHITAKER: Yeah. The good news is that the biggest economy, Germany, has committed to get to the spending targets in the next four years. And that is very important. You know, what Germany does is going to be a lot more important—nothing against my friends from North Macedonia, but if North Macedonia gets there in four years it’s not going to make a huge difference because their economy’s not big and their population’s not big. But Germany will. And that’s going to—that’s probably going to, what I would say, paper over a little bit of some of the inconsistencies. But we’re going to need countries like Spain and Italy and several others to get serious.

But there—but there are countries that are sober/serious, especially those on the frontlines of Russia on the eastern flank. I mean, Poland is clear-eyed on what the threat is and, you know, they’re going to be at 5 percent here in the next year. All the Baltic countries—Estonia, Latvia, Lithuania—they’re going to be at 5 percent spending on core defense. I mean, they are—they are investing. But again, you’re talking about countries that are smaller than my home state of Iowa; you know, that are less than two million citizens. And so, you know, it’s going to be the big countries like Germany, France, Great Britain, Italy that are going to really determine whether Europe steps up.

And so Germany is the good-news story, and we need to keep encouraging them to make those big spending jumps. I’m a little—you know, I’m going to continue to watch our friends in France and Great Britain. I think the desire is there, but the economics are just not there. I mean, the borrowing capacity is not really going to cover what they need to do, and their economic growth is equally slow. And they’re going to—they’re going to have to structurally rethink how they’re doing growth in their country and invest in ways to encourage businesses to grow, entrepreneurs to start new businesses, and create a culture where that is sustained.

FREDERICK KEMPE: Thank you for that.

So in the past President Trump’s expressed frustration with the concept of collective defense for allies who are not paying where they ought to be paying. We’ve seen the Russian incursions now in the airspace over countries like Poland and Estonia, however, who are hitting their numbers and have been doing so for some time. Where do you—how serious do you see these new incursions over airspace? How serious is the United States looking at this? How can the alliance deter future such incidents?

MATTHEW WHITAKER: Yeah. Well, we—I mean, we’re going to defend every inch. And I think I’ll point to the good-news story. So the—so the drones that flew into Polish airspace were tracked, were shot down. Many of them were shot down by F-35s and F-16s. And you know, that shows a domain awareness and an air defense strategy that I think is—shows that NATO is serious and ready to move.

I think one of the things that I’m looking at is how we can do that better—how we’re not firing two-million-dollar missiles to shoot down six-hundred-dollar Shaheds. And that’s something that we’re working very closely with the military leadership within NATO and the US military leaders to make sure that we have multilayered at all altitudes air defense.

And then Estonia is another great example. I mean, from the moment those planes took off, they were tracked by our—by our radars. Ultimately, Sweden, Finland, and the Italian air force all were part of making—escorting those planes, let’s call it, and making sure that they were not a threat to the capital in Estonia.

And so each one of these examples, I think, demonstrates NATO capabilities.

The thing that I want to remind everybody is, you know, we’re in this—if you think about how Iran treated the United States and our allies, it was kind of this no war, no peace—N-O war and N-O peace. And I think we’re—I think that’s probably what Russia is trying to do to NATO right now, is to not cross a line that drags the United States and our allies into a war, but they also are trying to be disruptive and present kind of asymmetrical threats. And that’s, you know, another area where I’m working every single today together with our allies and our—and our military leaders, is to make sure that we have better options on the asymmetrical war and the hybrid war; and to make sure that we’re not just always reacting, that we are—that we are strategic, and that we have an ability to respond in kind, and at the same time to play the same game; you know, if we’re really in this sort of hybrid war, to make sure that the—that we have enough rungs on the escalation ladder that we can also play in that domain.

And I’m just ensuring that, again, we’re strong and go unchallenged, because I think a lot of people think that somehow these challenges that Russia presents to us are—somehow demonstrate our weakness. It’s quite the opposite. I mean, we’re all over every single one of these threats.

FREDERICK KEMPE: So very interesting last week in New York, after meeting with the Ukrainian president, President Trump said Ukraine can and should retake territory it has lost. That seemed to some in the media and some observers as a—as at least a change of rhetoric. He’s now considering providing Ukraine Tomahawk missiles, though as I understand it still through NATO purchases not direct support. Then, on Sunday, Vice President Vance attributed President Trump’s recent change in attitude to the continued loss of life, impact on Russia’s economy, and said, quote, “The Russian economy is in shambles. The Russians are not gaining much on the battlefield.”

Is there a shift going on in the—in the administration in the United States toward Russia right now? And, if so, what does it consist of?

MATTHEW WHITAKER: You know, I think, first of all, President Trump has been very clear that he’s frustrated with Vladimir Putin, that Putin could end this war if he wanted to and continues to fight—and in fact, not only continues to fight, but every time that President Trump makes an entreaty to Vladimir Putin, Putin then responds by sending massive amounts of drones and missiles at cities in Kyiv—cities in Ukraine. And so, ultimately, I think President Trump has determined that—of the two sides, that the Russians are less willing to negotiate and resolve this than the Ukrainians, who appear to be willing to give a lot for peace.

And at the same time, there’s just a battlefield reality that Russia continues to lose about, depending on the day, about a thousand soldiers every single day, which is just—it’s incomprehensible. In over four years, they’ve lost about a million soldiers on the battlefield for less than 20 percent of Ukrainian territory. And it’s just—ultimately, a snail could have left the border with Russia and Ukraine and been to Poland already, you know, in all seriousness.

FREDERICK KEMPE: Yeah.

MATTHEW WHITAKER: So they can’t even move as fast as a snail. It’s like this pace with which, you know, this—and then for a day they tried to—you know, Russia tried to convince us that they’re—that they’re—really, they’re a bear, not a paper tiger, you know?

FREDERICK KEMPE: Yeah.

MATTHEW WHITAKER: President Trump called them a paper tiger, and they spent a day trying to explain how, really, they were a bear. And you know, I mean, a bear could have probably made it from the border to Poland in a couple days, I’m guessing.

But you know, this is the situation we find ourselves in. There is a—there is a detachment from reality that the Russians currently have as to their military success on the battlefield, and most likely that is the generals and the military leaders that are not providing real information to Vladimir Putin at the Kremlin as to what’s happening on the battlefield.

FREDERICK KEMPE: Yeah.

MATTHEW WHITAKER: But this war needs to end. President Trump’s been so clear and clear-eyed about how this war needs to end. It is a completely senseless war, it makes no sense whatsoever to continue this on the battlefield, and it needs to end.

And you know, I think one of the things that I would point to, Fred, that I think is crucial is President Trump has made available the best weapons in the world—American armaments, munitions—to sell to our European NATO allies plus Canada and then provide to Ukraine. And that’s another area where, if we talk about Europe taking over the conventional defense of the continent, then that—those sales should continue to move at pace. And we’ve—you know, we’ve sold billions already and we have billions more available. Ukraine needs it, wants it, and we need to make sure that that continues to flow and that—and that our European allies are stepping up and buying that.

FREDERICK KEMPE: Yeah.

So let me end with a question, one of my—as you know, I always like to point to a part of your biography that appeals to me. You’ve got this amazing career in public service and private practice, but you were also a player on a Big Ten team in Iowa that went to the Rose Bowl. That’s not quite—

MATTHEW WHITAKER: At THE University of Iowa.

FREDERICK KEMPE: The University of Iowa. And that’s not quite the World Cup, which is going to be played in the United States next year, in 2026, but it comes pretty close. In football, if you see a strategy’s not working you change on the field. So on the field with Russia right now, since it’s not coming to the negotiating table, since it seems stuck but Russia also seems economically weak, isn’t it time to double down on sanctions? Isn’t it time to double down on the military efforts against Russia to bring—isn’t that going to be necessary to bring Putin to the table?

MATTHEW WHITAKER: Ultimately, that’s up to President Trump and the Congress. But I think he knows that there are multiple steps.

And so he put sanctions on India. Certainly, they have reacted. There’s a—there’s a lot of other things we can do on a sanctions front, on a shadow fleet front. There are a menu of items that we could do. But we can’t do it alone.

And this—I think this is one of President Trump’s frustrations with the EU especially, is they want the United States to bear the weight and the burden of sanctions, whether it’s against China, whether against Brazil, or India, or any other countries that are buying Russian oil and gas. And all he’s saying is that we need to move together. Like, we are more powerful as an alliance and as allies if we all work together instead of, you know. But the EU, obviously, has challenges in their membership and who’s willing to—you know, because Hungary, who’s buying a hundred percent of their oil and gas, you know, they would be voting to sanction themselves, ultimately. And you know, that’s—that would be foolhardy. Hungary has an election in the spring that I think they’re very keen on how that plays out over the coming months. And that’s something that we’re watching very carefully.

But that’s why, as an alliance, the EU and the United States need to bring alternatives. I mean, I point again, Poland/Czech Republic eliminated their dependency on Russian oil and gas, and they have more trade space now and more ability to—you know, to navigate this current situation where Russia has invaded Ukraine and continuing to fight the war. And I think we need to—for these landlocked countries, and together with Turkey, I think we need to provide them alternatives, whether that’s, you know, American LNG, whether that is oil, you know, and building pipelines and the things—again, the hard work that it’s going to take to actually change the calculation on these matters.

FREDERICK KEMPE: Mr. Ambassador, I wasn’t quite sure how I could bring American football together with Ukraine, but thank you for this—

MATTHEW WHITAKER: Just know it’s very hard to watch in Europe. Six hours ahead is—those night games are impossible.

FREDERICK KEMPE: So, look, very much look forward to the rest of this conference. Thanks for kicking us off in such fine fashion.

Watch the discussion

The post US Ambassador to NATO Matthew Whitaker’s message to allies ‘dragging their feet’ on defense spending appeared first on Atlantic Council.

One of China’s most prominent guests was Russian President Vladimir Putin, who was accorded a place of honor alongside the Chinese leader at a military parade in Beijing to mark eighty years since the Japanese surrender and the end of World War II. On the eve of the parade, Indian Prime Minister Narendra Modi was pictured in friendly discussion with Putin and Xi at the Shanghai Cooperation Organization summit in Tianjin.

The optics coming out of China were unmistakable. While the main message was one of Chinese economic and military might, the Tianjin summit and Beijing parade also allowed China, India, North Korea, and others to underline their continued backing for Russia and their rejection of Western efforts to isolate Vladimir Putin over the invasion of Ukraine.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

The Chinese and Russian leaders held a series of meetings during Putin’s visit, with Xi hailing his Kremlin counterpart as an “old friend.” This warm welcome came as no surprise. While China officially claims to have a neutral stance toward the Russian invasion of Ukraine, Beijing stands accused of playing a pivotal supporting role in the Russian war effort. Since 2022, China has emerged as the key client for Russian energy exports, helping the Kremlin to compensate for the loss of European markets. Chinese companies also reportedly provide “nearly 80 percent” of the sanctioned dual-use items Russia needs to continue the war.

China and Russia indicated their commitment to further energy sector cooperation by signing a deal to build the long-delayed Power of Siberia 2 gas pipeline connecting the two countries. While the agreement leaves a number of key questions unanswered, Moscow is signaling that it has energy export markets beyond Europe. Even if only smaller oil and gas projects move forward, they could prove jointly consequential for the two countries.

North Korean leader Kim Jong Un joined Xi and Putin for the Beijing military parade and used the occasion to reaffirm his “full support” for Russia, which he framed as a “fraternal duty.” While China continues to deny directly supporting the Russian war effort, North Korea has reportedly provided Russia with over 12 million rounds of artillery, rocket launchers, self-propelled guns, over 100 ballistic missiles, vehicles, and other forms of heavy artillery, while also sending around 15,000 soldiers to fight alongside the Russian army. By summer 2025, Pyongyang was supplying up to 40 percent of the ammunition used by Russia in Ukraine, according to Ukrainian military intelligence chief Kyrylo Budanov.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

India’s Modi also displayed warm ties with Putin, praising his “excellent” bilateral meeting with the Russian leader in Tianjin. Delhi has stressed the need for peace in Ukraine while emphasizing a business-focused relationship with Russia, but India has recently faced a Trump administration backlash over the country’s expanding imports of Russian energy resources. Since the start of the invasion, India’s Russian crude purchases have risen dramatically. In 2024, Russian crude represented around 40 percent of Indian imports, up from just 3 percent three years earlier.

Modi and Putin came together in China against a backdrop of tariffs imposed by the United States in response to India’s continued purchase of Russian oil, a move slammed by Delhi as “unfair, unjustified, and unreasonable.” Amid mounting tensions with the US, Modi’s very public show of support for Putin was interpreted by many as a calculated act of defiance.

None of this went unnoticed in Western capitals. Indeed, numerous politicians and commentators saw events in China as confirmation that an “anti-Western alliance” was taking shape, with Beijing and Moscow leading the way. The most striking response came from US President Donald Trump. “Looks like we’ve lost India and Russia to deepest, darkest China. May they have a long and prosperous future together,” the US leader quipped on social media. While Trump later walked this comment back in regard to India, he repeated his “disappointment” with Delhi over its Russian oil purchases.

Not everyone is convinced by talk of a new global order. Skeptics noted that beyond the pomp and pageantry, last week’s events in China did not produce much in the way of concrete results. The single biggest breakthrough was the agreement over a new Russia-China pipeline, but even this was far from conclusive. Meanwhile, although China, Russia, and India may be able to find common ground in their mutual dislike of Western dominance, they also disagree on a wide range of important issues.

It is still too early to proclaim the emergence of a fully-fledged anti-Western alliance, but major geopolitical shifts are clearly underway that will shape the global order for decades to come. In the short term, the support of China, India, and North Korea for Russia’s war in Ukraine will allow the killing to continue while undermining Trump’s efforts to pressure the Kremlin into ending the invasion.

Katherine Spencer is a program assistant at the Atlantic Council’s Eurasia Center.

Further reading

UkraineAlert Aug 28, 2025

Putin wants to capture Ukraine’s crucial fortress belt without a fight

By Mykola Bielieskov

As US-led efforts to end the Russian invasion of Ukraine struggle to gain momentum, Vladimir Putin’s latest territorial demands include the surrender of strategically vital and heavily fortified Ukrainian land in the east of the country, writes Mykola Bielieskov.

Conflict Disinformation

UkraineAlert Sep 4, 2025

Ukrainian bombing campaign turns Russia’s sheer size into a weakness

By David Kirichenko 

For centuries, Russia’s sheer size has been its greatest asset. Ukraine now intends to transform this vastness into a weakness with a long-range bombing campaign targeting Putin’s economically vital but vulnerable energy industry, writes David Kirichenko.

Conflict Drones

UkraineAlert Sep 2, 2025

Putin’s failed summer offensive shatters the myth of inevitable Russian victory

By Peter Dickinson

The failure of Putin’s summer offensive should help to debunk the persistent myth of inevitable Russian victory and persuade Western leaders to increase their support for the Ukrainian war effort, writes Peter Dickinson.

Conflict Defense Policy

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post China, India, and North Korea back Russia as changing global order takes shape appeared first on Atlantic Council.

The country overall has experienced a leap in prosperity in recent years. Between 2022 and 2024, Guyana’s economy grew at the mind-boggling rate of 46.9 percent on average per year, according to the International Monetary Fund. The country’s recent surge of economic growth is built on the back of the government’s management of Guyana’s oil resources and investment in nonenergy sectors, such as health, agriculture, construction, and hospitality. With the increased revenues from oil, Ali’s government has begun an overhaul of the country’s infrastructure, such as the soon-to-be-completed Demerara Harbour Bridge and the Eccles to Ogle Highway. Now, with five more years in office, Ali is likely to shift his approach to include a new phase of Guyana’s development, one primarily focused on building a resilient economy. Even with a booming economy, however, there will be challenges, from potential Venezuelan aggression to the need to take ownership as a growing regional leader in the Caribbean. 

In speeches during the recent election campaign, Ali stressed that he would focus on three areas in a second term: (1) investing in human capital and tools for wealth creation for the average Guyanese; (2) capitalizing on natural gas resources to build out new industries, such as petrochemicals and data centers; and (3) continue investing and scaling nonenergy economic sectors. 

All three of these areas align with Ali’s intent to ensure that the DNA of Guyana’s economy is innately resilient to the ebbs and flows of global markets while continuing to protect the country from the pitfalls that lead to the so-called “resource curse.” Building skills at home fosters entrepreneurship and small business growth while developing the petrochemical sector can help bring new jobs and manufacturing capabilities. Finally, nonenergy investment decreases economic vulnerabilities by making government revenues less dependent on oil and gas resources.

Fortunately, this time around, Ali’s government has more tools at its disposal. 

First, Guyana’s foreign investment portfolio is growing. Major international companies across the energy, construction, health, and hospitality sectors have made significant investments in the past five years with substantial success. This should help de-risk concerns for international companies that are currently on the fence about investing in a country that is still a small market with an open-facing economy compared to its neighbors in Latin America. 

Second, Guyana’s local private sector has matured quickly in a short period, now on track to compete with international firms that are bidding on infrastructure projects and the development of new financial instruments. 

Third, Ali’s administration can capitalize on five years’ worth of diplomatic relationship-building with the United States, the United Kingdom, India, and countries in Africa. These states—whose leaders share strong ties with Ali—are likely to further encourage companies in their countries to accelerate the exploration of investment opportunities in Guyana. 

Despite the bright road ahead, challenges still await Ali and his government. 

Venezuela is the most immediate threat. Persistent saber-rattling from Venezuela’s autocratic leader Nicolás Maduro—in the form of naval incursions and encroachment on the land border with Guyana—is expected to continue and perhaps even intensify over the next few years. To date, Ali has worked within international institutions, such as the International Court of Justice (ICJ), as well as with allies such as the United States, to contain the threat. Going forward, Ali may need to flex his diplomatic muscles, as flashpoints in the border controversy are likely to arise following next year’s ICJ ruling on the validity of the 1899 Arbitral Award, which settled the country’s border with Venezuela. If the ruling is unfavorable for Venezuela, then Ali may be required to again engage with Guyana’s international allies and regional neighbors to contain potential aggressive tactics from the Maduro regime.   

Ali will also likely need to take on more responsibility as a Caribbean leader. Guyana already leads the region in its efforts to decrease the overall food import bill, but with the country’s wealth and international profile growing, Caribbean allies will look to Ali to play both mediator and anchor on a variety of issues. For example, the Caribbean’s response to the US naval deployment in the Southern Caribbean focused on counternarcotics operations will likely continue to come through Guyana, given the country’s proximity to the vessels and its border controversy with Venezuela. This could place Guyana at a friction point between the Trump administration and Caribbean leaders that call for the region to remain a “zone of peace.” 

Even with these challenges, Guyana’s economy is on track to continue its rapid growth. The country’s next step is to bring the benefits of this growth to all the Guyanese people, including by making people and their skills the backbone of the economy. Moreover, the government will need to do this while navigating the regional and global responsibilities that have been cast Guyana’s way. If Ali can manage all these variables, then Guyana might see its next phase of growth as one that continues beyond the next five years and into the next few decades. 

Wazim Mowla is the fellow and lead of the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center.

The post What Guyanese President Irfaan Ali is likely to focus on in his second term appeared first on Atlantic Council.

If Russia and China both threw their weight behind completing the PoS-2, then Western capitals would not be wrong to perceive it as evidence of Putin and Xi deepening their countries’ economic, political, and perhaps even military cooperation. But the pipeline is unlikely to advance—at least not with great urgency. Moscow’s enthusiasm for the project is not matched by Beijing. 

Still, the Gazprom announcement is significant. While media attention is understandably fixated on the potential 50 billion cubic meters per year (bcm/yr) from PoS-2, Miller also announced capacity expansions on the first Power of Siberia (PoS-1) pipeline and the Far Eastern Route totaling 8 bcm/yr. If true, these incremental volumes from capacity expansions would supplement other Russian natural gas exports to China already occurring directly via pipeline connections and Arctic LNG 2 and indirectly via Central Asia. Altogether, these smaller expansions approach the scale of another PoS-1 pipeline over time, even if not in a single megaproject.

Either strategically or inadvertently, Beijing and Moscow may be adopting a “Moneyball approach” to natural gas cooperation: while they may not be able to build a megaproject, they may be re-creating the volumes in the aggregate via several smaller projects. 

Why Russia wants the pipeline

Three-and-a-half years into Russia’s war on Ukraine, the Russian economy is proving more resilient than many expected, but a megaproject pipeline could mitigate looming post-war challenges.  

The 50 bcm/yr of new export flows from PoS-2 (58 bcm/yr, if the PoS-1 and Far Eastern Route deals also move forward) would reshape global gas markets, undercut liquefied natural gas (LNG) exporters—especially the United States, the world’s largest exporter—and lock Beijing and Moscow into a thirty-year economic commitment.

Moscow can draw on nonliquid assets and more than $200 billion of central bank reserves to keep the economy afloat, as the Atlantic Council’s Charles Lichfield recently noted. Still, Russia’s long-term economic liabilities may become more pronounced in the post-war period, even if it enters into a cease-fire in the coming months: World oil prices are expected to soften. The Russian labor force has permanently shrunk due to the sustainment of more than one million casualties in the war. And shifting from a war economy will prove wrenching for whole sectors and regions, especially as Chinese firms that expanded into wartime Russia will complicate the transition.

While the PoS-2 and the other gas agreements won’t solve Russia’s fundamental challenges, it could make them more manageable. Significantly, Gazprom may believe that even announcing headway in PoS-2 negotiations may grant it more leverage in postwar negotiations with European buyers. 

Why China may be more hesitant

While Russia is eager, perhaps even desperate, to sell gas to China, there appears to be considerable ambivalence in Beijing. While China increasingly requires more energy, and there is still plenty of appetite for coal-to-gas switching in northern China, it’s unclear that the pipeline will move forward for several reasons. 

To date, there have not been any authoritative statements from the Chinese government or Chinese media regarding what it calls the “Western natural gas pipeline.” While Russian media has promoted the purported deal, and Western media outlets have reported these findings, authoritative Chinese government organs and state media outlets have been quiet so far, suggesting negotiations are still ongoing.  

Additionally, there is no public information about contract terms—and the devil is in the details. While the original Power of Siberia’s terms have never been publicized, the Carnegie Endowment for International Peace’s Sergey Vakulenko’s imputation of prices suggests Russia secured the worst terms out of all Chinese pipeline partners. Furthermore, Russia’s negotiating leverage has deteriorated starkly since PoS-1 was inked in 2014. Global LNG supply is much more competitive vis-à-vis pipeline natural gas. Russia’s full-scale invasion of Ukraine severely damaged its ability to sell to Europe, its other major overland export market. And new technologies—many of them made in China—are increasingly viable alternatives to Russian natural gas.

But the most significant reporting omission may be financing, which was a key sticking point in the negotiations over the first Power of Siberia pipeline: Gazprom initially pushed for a large Chinese prepayment to help fund the Russian section, but Beijing resisted. As a result, Gazprom was left to finance the domestic portion itself, while the state-owned China National Petroleum Corporation backed the Chinese section. 

Although the Chinese economy is much larger than in 2014, financing PoS-2 will likely prove much more difficult. To start with, the pipeline is much longer (1,400 km) and larger (50 bcm/yr) than its predecessor, implying higher capital expenditures, financing costs, and longer payback periods, especially as the project is unlikely to open any time before 2030. If the project moves forward, Russia will likely shoulder most of the financing risk, as China has little reason to accept worse terms than before. Finally, the pipeline could become a stranded asset due to uncertainties in Sino-Russian relations or technological advances. 

Indeed, if Beijing inks PoS-2, then it will effectively bet against developing two technologies it seeks to dominate: heat pumps and batteries. 

PoS-2 would mainly serve northern China, where demand is concentrated in industry and heating, not power generation. Chinese provincial-level gas demand data is sparse, but China’s National Energy Administration reports industry, city gas (heating), and power account for 41 percent, 34 percent, and 18 percent of consumption, respectively, nationwide—and China’s natural gas-fired power plants are overwhelmingly concentrated in the south and east.

China has already installed more than 250 gigawatts of electricity-driven heat pumps, while the central government has issued plans to expand the industry. Coal-to-electricity switching (and even gas-to-electricity switching) will limit the growth prospects of natural gas for heating. 

Chinese natural gas demand in industry is also likely to face pressure, as recent analyses show battery electric vehicles making headway even in the heavy-duty vehicle sector. This could limit future demand for LNG-powered trucks, which have become an increasingly important driver of Chinese natural gas demand. Given that China will very likely see additional advances in next-generation battery chemistries, vehicles powered by electricity—not LNG—may increasingly replace diesel-fired heavy-duty vehicles in northern Chinese cities. 

Implications for US and European policymakers

The PoS-2 faces significant, perhaps even insurmountable economic, financial, and political challenges. Miller’s announcement this week should largely be read as a signal of Gazprom’s increasing desperation, not that the pipeline will move forward. 

Still, the deal is significant—even if only the smaller projects totaling 8 bcm/yr move forward. That volume, the equivalent of 6 million tons per year, or 0.8 billion cubic feet per day, is roughly the size of a small LNG project. Furthermore, China and Russia have established a pattern of inking smaller oil and gas deals that can be cumulatively significant. 

Such smaller arrangements include a 10 bcm/yr contract signed in February 2022 for the Russia-to-China Far Eastern Route. But some exports are taking place indirectly and under the radar, including the 2023 agreement between Russia and Uzbekistan to intake 2.8 bcm/yr of imports that could scale up to 10 bcm/yr by 2030. Indeed, Russian net exports to Commonwealth of Independent States countries—which include Belarus and Central Asian states—have more than doubled since the start of Russia’s full-scale war in Ukraine, growing by 13 bcm/yr. Importantly, Russia’s exports to Central Asia may support the region’s shipments to China, although this relationship is not one-for-one. Turning to oil, China signed an agreement for 100 million tons of Russian crude oil over ten years in February 2022; it also bought an additional 2.5 million tons per year this week.

In sum, while it is an open question of how far the Power of Siberia-2 project will go, Russia has already secured significant oil and gas export volumes via smaller projects, largely from Chinese buyers. 

So, how should Washington and Brussels view these developments?

A portion of the Trump administration seems to believe that it can effectuate a “reverse Kissinger” and peel Moscow away from Beijing. This development is evidence against that approach succeeding. Even if China and Russia have “only” agreed to a slimmed-down agreement of 8 bcm/yr, it will harm US interests by constricting LNG exports and making Beijing less reliant on US energy. 

Similarly, the gas announcement could be an attempt by Russia to signal to Europe that it can sell to other markets. Moscow likely hopes that the prospects of a megadeal with China, however slim, will give it more leverage in any postwar negotiations with European gas buyers.

Washington and Brussels now have an opportunity to advance their shared goals at the expense of Beijing and Moscow. China is Russia’s most important trade partner and provides indispensable defense industrial base support to Moscow. Any further natural gas tie-in risks prolonging the war in Ukraine by sustaining Russia’s economy and bolstering Putin politically. The United States and its European allies should jointly consider targeted secondary sanctions against Russian energy companies, Chinese firms aiding the Russian war effort, or both. 

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center and the Indo-Pacific Security Initiative; he also edits the independent China-Russia Report.

Landon Derentz is vice president, energy and infrastructure, senior director and Morningstar Chair for Global Energy Security at the Atlantic Council Global Energy Center. He previously served as director for energy at the White House National Security Council and director for Middle Eastern and African affairs at the US Department of Energy.

The post Why China and Russia are unlikely to move the Power of Siberia-2 pipeline forward appeared first on Atlantic Council.

Ukrainian bombing raids on Russian oil refineries have been underway since the early stages of the war but have gained significant momentum over the past month. While the Kremlin remains tight-lipped over the impact of these attacks, evidence of significant damage is mounting. By late August, Ukraine had succeeded in disrupting at least 17 percent of Russia’s refining capacity, according to Reuters. Britain’s Economist magazine says that the figure may be as high as 20 percent.

Ukraine’s attacks have sparked a fuel crisis in Russia, with queues reported at gas stations throughout the country amid a surge in prices. By early September, Russia’s wholesale gasoline price had climbed to record highs. This combination of shortages and rising costs is already creating unwelcome social pressures that the Kremlin cannot afford to ignore. If Kyiv is able to maintain the current pace of attacks, this could begin to seriously constrain Putin’s ability to fund the invasion of Ukraine.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

Russia depends heavily on oil and gas revenues to maintain the war effort and cover the rising cost of enticing new military recruits. The Kremlin requires a steady flow of manpower as it seeks to overwhelm Ukraine’s defenses, but the Russian army’s reliance on frontal assaults virtually guarantees heavy losses. In order to sustain current troop levels, Russia is therefore forced to offer exceptionally high salaries and generous enlistment bonus payments.

Disruption within the oil and gas industry will not immediately impact Russia’s war economy, but it could force Putin to make difficult decisions. Since the start of the full-scale invasion more than three years ago, the Kremlin dictator has made it a priority to shield ordinary Russians from the impact of the war. If Ukrainian attacks on oil refineries continue, the Kremlin may have to cut spending elsewhere in order to finance the military, creating the potential for destabilization on the home front.

So far, Moscow is attempting to downplay the significance of Ukraine’s airstrikes, with Kremlin officials attributing fuel problems to other causes and blaming any obvious damage to refineries on falling drone debris. However, efforts are also underway to suppress news of successful Ukrainian attacks. This has reportedly included Orwellian announcements broadcast in public spaces informing Russians not to post footage of drone strikes on social media.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

Ukraine’s increased capacity to strike deep inside Russia reflects the progress made by Kyiv since 2022 in developing its own arsenal of long-range drones and missiles. During the initial stages of the full-scale invasion, the Ukrainians had only a handful of drones capable of conducting strikes across the border. The country is now reportedly producing thousands of long-range drones every month, and has recently unveiled a number of domestically produced cruise missiles with far greater payloads that could allow Ukraine to significantly escalate the current bombing campaign in the coming months.

The Ukrainian military is learning and improving with each new strike. Key refineries and weak points in Russia’s energy infrastructure are now being struck again and again in order to hinder repair works and compound the burden on Moscow’s energy logistics. When selecting targets, Ukrainian planners are also well aware of the Russian energy industry’s dependency on Western components, with sanctions often making it difficult for Moscow to source replacements.

Crucially, Ukraine’s bombing campaign is exploiting Russia’s size and taking advantage of the country’s already overstretched air defenses. Much of Russia’s existing air defense capacity is currently deployed in occupied regions of Ukraine and along the front lines of the invasion. This leaves a limited number of available systems to defend Russian cities and other high value targets such as the palaces of Putin and the Kremlin elite. By increasing the geographical range of its bombing raids, Ukraine is forcing Russia to further disperse its air defenses. This creates inviting gaps and leaves some targets undefended.

Even with dramatically enhanced air cover, it is likely that the Kremlin would still struggle to entirely nullify the threat of further airstrikes on the oil and gas sector. With dozens of refineries, storage facilities, and port terminals, together with thousands of kilometers of pipelines spread over eleven times zones, Russia’s energy industry may simply be too large to be adequately protected against aerial attack.

Officials in Kyiv recognize that the current air offensive will not prove decisive. Nevertheless, they hope Ukraine’s increasing ability to inflict serious damage on Russia’s energy sector can help persuade Putin to finally engage in peace talks. The Russian ruler seems completely unconcerned by the catastrophic casualties his army is suffering in Ukraine, but he may not find it so easy to ignore growing threats to the economic stability of Russia itself.

Many Ukrainians also see enhanced long-range strike capabilities as crucial for efforts to deter future Russian aggression. Russia’s size makes it a formidable foe but this scale also leaves the colossal country exposed to counterattack by a smaller opponent with an arsenal of weapons tailored to the task of giant-killing. As former Ukrainian defense minister Oleksiy Reznikov noted recently, “Ukraine is a David that tries to find Goliath’s weaknesses.”

David Kirichenko is an associate research fellow at the Henry Jackson Society.

Further reading

UkraineAlert Aug 21, 2025

Putin is facing a fuel crisis as Ukraine escalates attacks on Russian refineries

By David Kirichenko

Historically, Russia’s sheer size has always been considered one of its main strengths. By launching waves of airstrikes across the country, Ukraine now intends to exploit this vastness and transform it into Russia’s greatest weakness, writes David Kirichenko.

Conflict Defense Technologies

UkraineAlert Aug 28, 2025

Russia attacks Zelenskyy’s legitimacy to derail US-led Ukraine peace talks

By Serhii Savelii

Moscow’s efforts to portray Zelenskyy as illegitimate fall apart when weighed against Ukraine’s Constitution and the country’s political practice, along with international precedents and legal tradition, writes Serhii Savelii.

Conflict Democratic Transitions

UkraineAlert Sep 2, 2025

Putin’s failed summer offensive shatters the myth of inevitable Russian victory

By Peter Dickinson

The failure of Putin’s summer offensive should help to debunk the persistent myth of inevitable Russian victory and persuade Western leaders to increase their support for the Ukrainian war effort, writes Peter Dickinson.

Conflict Defense Policy

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Ukrainian bombing campaign turns Russia’s sheer size into a weakness appeared first on Atlantic Council.

Hungary’s first act of retaliation was to ban Ukraine’s drone force commander Robert Brovdi from entering the country. Brovdi, who is of Hungarian descent, responded defiantly. In a strongly-worded social media post, he branded Hungary’s pro-Kremlin authorities “dancers on bones” and accused them of being complicit in Russian war crimes by funding Moscow’s invasion. “Your hands are soaked in blood up to the elbows, and we will not forget it,” he commented.

Brovdi’s reply may not have been very diplomatic, but it reflected the painful truth. Moscow’s invasion of Ukraine is being financed primarily by the export of Russian oil and gas. As one of the Kremlin’s last remaining European customers along with neighboring Slovakia, Hungary is feeding Putin’s war machine.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

Since the start of Russia’s full-scale invasion of Ukraine in February 2022, Hungary and Slovakia are believed to have paid Moscow close to $6 billion in tax revenues for crude oil deliveries alone. This contribution is enough to finance thousands of the cruise missiles that are used to bomb Ukrainian towns and cities on a daily basis.

Following Russia’s invasion, the EU announced plans to completely phase out Russian fossil fuel imports. However, rather than diversify away from Moscow, Budapest and Bratislava have actually increased their dependency on Russian energy deliveries. Hungary has expanded its reliance on Russian oil from 61 percent on the eve of the invasion to the current figure of 86 percent, while Slovakia is now thought to be almost entirely dependent on Moscow for oil. Similar trends are evident in terms of Russian gas exports to both countries.

This continued reliance on Russia is a choice rather than a necessity. A report published earlier this year by the Center for the Study of Democracy (CSD) and the Center for Research on Energy and Clean Air (CREA) found that Hungary and Slovakia could both potentially diversify their energy supply strategies by importing non-Russian oil via alternative sources such as Croatia’s Adria pipeline.

Opportunities for diversification also exist in relation to natural gas. For example, the two countries could secure non-Russian gas deliveries in the form of liquefied natural gas from global suppliers via existing LNG terminals located in Germany, Poland, Italy, or Greece.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

Hungary and Slovakia argue that their reliance on the Kremlin is motivated by cost, with imports from Russia cheaper than purchasing energy resources elsewhere. While wholesale prices paid by Hungarian and Slovakian buyers are not officially released, data published by the European Commission indicates that natural gas prices for end consumers in Hungary and Slovakia are among the highest in the EU. In other words, Hungarian and Slovakian consumers do not appear to be any better off than their EU peers as a result of ongoing Russian oil and gas deliveries.

A key long-term oil export contract between Hungarian and Russian companies was due to expire at the end of June 2025, thus potentially freeing the Hungarian side of contractual obligations and empowering it to seek alternatives elsewhere. It is unclear whether the agreement has been renewed or if Hungary is now simply buying Russian oil on the spot market, but continued imports point to the fact that the Hungarian government has no plans to turn away from Russian fossil fuels.

Hungary has known for more than three years that the EU is aiming to end energy imports from Russia. Budapest also has alternative options available that would allow the country to reduce its reliance on Russian oil and gas supplies. Instead of diversifying, however, the Hungarian government has chosen to deepen its dependence on the Kremlin. They have done so despite knowing that they are helping to finance the largest European war since World War II.

Ukraine’s recent strikes on the Druzhba pipeline are not only an attack on Russia’s war economy. They are also a wake-up call for Hungarians highlighting the role being played by their country in the funding of Russia’s invasion.

Dr. Aura Sabadus is a senior energy journalist who writes about Eastern Europe, Turkey, and Ukraine for Independent Commodity Intelligence Services (ICIS), a London-based global energy and petrochemicals news and market data provider. Her views are her own.

Further reading

UkraineAlert Aug 28, 2025

Putin wants to capture Ukraine’s crucial fortress belt without a fight

By Mykola Bielieskov

As US-led efforts to end the Russian invasion of Ukraine struggle to gain momentum, Vladimir Putin’s latest territorial demands include the surrender of strategically vital and heavily fortified Ukrainian land in the east of the country, writes Mykola Bielieskov.

Conflict Disinformation

UkraineAlert Aug 28, 2025

Russia attacks Zelenskyy’s legitimacy to derail US-led Ukraine peace talks

By Serhii Savelii

Moscow’s efforts to portray Zelenskyy as illegitimate fall apart when weighed against Ukraine’s Constitution and the country’s political practice, along with international precedents and legal tradition, writes Serhii Savelii.

Conflict Democratic Transitions

UkraineAlert Aug 21, 2025

Sorry, Trump, but Putin will not pursue peace until he is facing military defeat

By Elena Davlikanova, Yevhen Malik

Following the recent Alaska and White House summits, it should now be abundantly clear that Russia will continue to reject Trump’s peace overtures until Putin faces significantly more pressure to end the war, write Elena Davlikanova and Yevhen Malik.

Conflict European Union

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Hungary has alternative energy options but chooses to rely on Russia appeared first on Atlantic Council.

Russia’s economy is struggling. Nearly four years of war expenses combined with Western sanctions have put Moscow’s economy on a wartime footing. Inflation and interest rates remain high at 8.8 percent and 18 percent, respectively. The Russian government continues to draw down its National Welfare Fund to cover its fiscal deficit. Energy exports, especially oil, remain a lifeline for Russia even though they are declining. Putin, quite literally, cannot afford to lose his remaining oil revenue. 

Russia’s National Welfare Fund

Russia continues to drain its financial safety net to cover the costs of war and fund its economy. Russian economists recently assessed that the country is in jeopardy of depleting its National Welfare Fund by 2026, warning that as of June the fund only maintained $36 billion in liquid assets. This is the lowest it has been in more than five years. 

Gold makes up about 40 percent of assets held in the National Welfare Fund. Market uncertainty and increased volatility in response to evolving US tariffs and bilateral trade deals, as well as other monetary policy risks, are driving investors toward gold as a safe-haven asset instead of the US dollar. As a result, gold prices surged to record highs in the spring and have been holding steady at over $3,300 per ounce, which benefits Russian coffers. High gold prices, coupled with lax sanctions enforcement, have helped Russia recover value in the National Welfare Fund, which can prolong the Kremlin’s ability to fund its war. However, Russia’s gold is finite and, according to press reporting, the government only has 139.5 metric tons of gold left—a significant decline from the more than 400 metric tons it held before its full-scale invasion of Ukraine in February 2022. If Moscow cannot generate revenue from energy sales, then it will need to tap into its remaining gold reserves to cover its spending, which will push Russia into further fiscal and economic decline. 

This predicament creates the perfect target for sanctions—Russian oil. 

Russia’s oil exports

The Group of Seven (G7) sixty-dollar-a-barrel price cap on Russian oil, coupled with sanctions on financial institutions such as Gazprombank, have restricted Moscow’s energy revenues. Despite these restrictions, Russia continues to generate income from the sale of its oil. In July, for example, it brought in $9.8 billion from oil and gas exports. Notably, this is a 27 percent decrease from a year earlier, further restricting Russia’s budget.

Russia continues to export most of its oil to China and India. Some of these transactions are compliant with the G7 price cap, while other transactions are the result of sanctions-evasion techniques, such as the shadow fleet and what Russia’s deputy trade commissioner has called a “very, very special mechanism” with Indian buyers. 

Earlier this month, the Trump administration announced 25 percent tariffs on Indian goods as a punishment for India buying Russian oil. The tariff rate is scheduled to go up to 50 percent on August 27 if India continues to buy Russian crude. However, the tariffs have not deterred Russia from supplying oil to India or deterred India and China from buying it. In fact, China appears to be increasing its purchases of Russian oil, despite Trump’s warning that he may consider retaliatory tariffs on Beijing in the coming weeks. Secondary tariffs are bringing Russia, China, and India closer together and strengthening their economic ties. This runs the risk of weakening US and European economic leverage in peace negotiations between Russia and Ukraine.

The United States needs to strengthen the West’s negotiating position and create more leverage to end Russia’s war on Ukraine. Sanctioning Russia’s oil, similar to the approach the United States took against Iran, will immediately disrupt Moscow’s oil revenue. With the safety net of the National Welfare Fund dwindling, Putin would have no choice but to negotiate with Western leaders to end Russia’s war. 

In addition, imposing secondary sanctions on Russian oil will force India, China, and other buyers to comply with US sanctions or risk losing access to the US-led global financial system. Licenses and exemptions can be used to mitigate unintended consequences, while increased production by the group of oil-producing countries known as OPEC+ can help offset the loss of Russian oil on the market. In exchange for a peace deal and security guarantees for Ukraine, the United States and Western partners can offer to lift sanctions and other restrictive measures that would allow the return of Russian oil to the market and save Russia’s economy from ruin. Such a peace deal should include, but not be limited to, Russia dropping its claims on Ukrainian territory, returning all Ukrainian children and prisoners of war, dropping court cases against Western companies complying with sanctions, making financial commitments for Ukraine’s reconstruction, agreeing to the deployment of a European-led deterrent force in Ukraine.

To start increasing financial pressure on the Kremlin, the US Treasury can close gaps between US and European Union (EU) sanctions on the shadow fleet by targeting the additional 105 vessels and companies involved in the shadow-fleet value chain that the EU targeted in July. Further, the US Treasury can target Russian oil companies including Gazprom, Lukoil, and Rosneft, which are currently subject to restrictions, but not subject to primary sanctions by the United States. The US Treasury can target Russian vessels operating outside of the shadow fleet, ports, and port operators, as well as service providers for seaborne and pipeline oil flows. The US Treasury can enforce existing sanctions on oil companies and producers, such as Gazprom subsidiary Gazprom Neft and Surgutneftegas. Enforcement includes following through on threats of secondary sanctions targeting the foreign financial institutions involved in transactions for Russian oil and oil-derived products. Existing executive orders provide the authority to target this activity, and new executive orders and legislation are not required. As the very least, simply enforcing the actions that have already been taken will have a significant impact on Russian oil revenues.

“Leverage: don’t make deals without it”

To Trump’s credit, his personal relationship with Putin creates the opportunity for dialogue and opens lines of communication that were previously closed. The US president is well positioned to bring about peace and achieve security guarantees for Ukraine, but his administration needs to arm him with the best tools and options to do so. 

In Trump: The Art of the Deal, Trump wrote, “Leverage: don’t make deals without it.” Sanctioning Russia’s oil and cutting off their revenue is the leverage Trump needs to negotiate an end to this bloody war and a lasting peace deal for Ukraine.

Kimberly Donovan is the director of the Economic Statecraft Initiative within the Atlantic Council’s GeoEconomics Center. She is a former senior Treasury official and National Security Council director.

Econographics

Apr 17, 2025

Russia Sanctions Database

By Kimberly Donovan, Maia Nikoladze, Lize de Kruijf

The Atlantic Council’s Russia Sanctions Database tracks the level of coordination among Western allies in sanctioning Russian entities, individuals, vessels, and aircraft, and shows where gaps still remain.

Eastern Europe Economy & Business

The post To end Putin’s war on Ukraine, Trump should sanction Russian oil appeared first on Atlantic Council.

Ukrainian long-range drone strikes have knocked out around 13 percent of the Russia’s oil refining capacity since the beginning of August, the Moscow Times reports. The situation is proving particularly challenging as the supply disruption caused by Ukrainian airstrikes is coinciding with a period of peak seasonal demand due to summer travel and the upcoming harvest season.

News of Russia’s growing fuel shortages has been welcomed by many in Ukraine. Ukrainian President Volodymyr Zelenskyy’s influential chief of staff Andriy Yermak noted that Russia had earlier done everything it could to deprive Ukraine of fuel. “Now they suddenly face shortages themselves,” he commented. “That’s what happens when you attack Ukrainians.”

Ukraine’s unfolding bombing campaign is no mere act of righteous retribution, of course. The recent strikes against Russia’s oil industry infrastructure are designed to directly hit Putin’s war economy and undermine his ability to continue bankrolling the invasion of Ukraine. With Kyiv’s European and American allies seemingly reluctant to impose tougher sanctions measures against the Russian energy sector, Ukrainians see the current wave of drone attacks as a highly effective form of “direct sanctions.”

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

The Ukrainian attacks on Russian refineries since the beginning of August are part of a wider pattern. In recent weeks, Ukraine has also struck multiple military production sites inside Russia, along with a number of fuel trains and logistics hubs in areas close to the front lines of the war. On August 18, Ukrainian drones destroyed the pumping station for the Druzhba pipeline in Russia’s Tambov region, shutting down this strategically important element of the Kremlin’s energy infrastructure carrying Russian oil to European markets.

Ukraine’s leaders regard the country’s growing long-range strike potential as an important factor in efforts to force Russia to end its invasion and come to the negotiating table. During the early months of the full-scale invasion, Ukraine had only a very limited number of drones capable of reaching targets inside Russia. Over the past three and a half years, Kyiv’s long-range arsenal has expanded dramatically, making it possible to launch increasingly ambitious air offensives.

The latest addition to Ukraine’s arsenal is a domestically produced long-range cruise missile dubbed the “Flamingo.” This recently unveiled missile has a reported range of over 3000 kilometers and carries a massive warhead that dwarfs anything Ukraine’s long-range drones are currently capable of delivering. Zelenskyy recently confirmed that the missile has undergone successful testing and should enter mass production by the end of the current year.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

Ukraine’s ability to establish domestic cruise missile production should come as no surprise. The country had earlier played a central role in the Soviet missile program, with Ukrainian city Dnipro known informally throughout the Cold War as “Rocket City.”

The revival of this tradition now gives Kyiv a potential trump card in talks with Moscow. Even with the country’s current limited domestic drone and missile capabilities, Ukraine is already proving itself capable of inflicting serious damage on Russia’s economically vital energy sector. If Kyiv reaches its goal of mass produced long-range cruise missiles, the consequences for Russia’s refineries, ports, and pipelines could be catastrophic.

Ukraine’s accelerating deep strikes come at a time when the dominance of drones is making battlefield breakthroughs increasingly difficult to achieve. While the Russian army continues to grind forward in eastern Ukraine, it is advancing at glacial pace and has managed to capture less than one percent of Ukrainian territory in the past one thousand days while losing hundreds of thousands of soldiers.

The current technological realities of the war clearly favor the defenders. This leaves no obvious pathway toward a decisive Russian military victory in Ukraine. Kyiv policymakers are hoping that if Putin is confronted with a bloody stalemate in Ukraine and the prospect of mounting attacks inside Russia, he may be forced to rethink his current uncompromising stance and seek a settlement to end the invasion.

Historically, Russia’s sheer size has always been considered one of its main strengths. By launching waves of airstrikes across the country, Ukraine now intends to exploit this vastness and transform it into Russia’s greatest weakness. The Kremlin simply does not have enough air defense systems to protect thousands of potential military and energy targets spread across eleven time zones. The only question is whether Ukraine can produce drones and missiles in sufficient quantities to destroy Putin’s war machine. Based on the current trajectory, there is certainly cause for concern in the Kremlin.

David Kirichenko is an associate research fellow at the Henry Jackson Society.

Further reading

UkraineAlert Aug 21, 2025

Sorry, Trump, but Putin will not pursue peace until he is facing military defeat

By Elena Davlikanova, Yevhen Malik

Following the recent Alaska and White House summits, it should now be abundantly clear that Russia will continue to reject Trump’s peace overtures until Putin faces significantly more pressure to end the war, write Elena Davlikanova and Yevhen Malik.

Conflict European Union

UkraineAlert Aug 7, 2025

Ukraine’s expanding robot army can help address manpower shortages

By David Kirichenko

Robotic systems are in many ways an ideal battlefield solution for Ukraine as the country seeks ways to leverage its proven tech prowess in order to defend itself in a grueling war of attrition against a far larger enemy, writes David Kirichenko.

Conflict Defense Industry

UkraineAlert Aug 19, 2025

A strong Ukraine is the only realistic security guarantee against Russia

By Peter Dickinson

Ukraine’s Western partners are preparing to offer security guarantees as part of efforts to prevent further Russian aggression, but it far from clear whether Western governments would actually fight Russia on behalf of Ukraine, writes Peter Dickinson.

Conflict Defense Policy

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Putin is facing a fuel crisis as Ukraine escalates attacks on Russian refineries appeared first on Atlantic Council.

Then in July, Boulos concluded a series of meetings in North Africa, which could open the door to another diplomatic breakthrough, this time in Libya, if the administration follows through.

Libya today

Libya has entered a period of fragile calm. The Government of National Unity (GNU), based in Tripoli, and the Libyan National Army (LNA), which controls the east of the country, have stabilized their respective territories, even as the two rival power centers vie for authority.

Deep problems persist. Political fragmentation and weak or absent state structures are creating the conditions for institutional paralysis. Russia and other countries continue to exercise dangerous influence. Desperation continues to send would-be refugees on the perilous trek north across the Mediterranean. But as the cease-fire brokered in 2020 between the GNU and LNA is continuing to hold, now is the moment for the United States to put diplomacy to work.

Recent US efforts 

US policy in Libya has evolved significantly from the shocking death of US Ambassador Chris Stevens in Benghazi in 2012. The Biden administration, for example, made a concerted effort to engage more with Libya. In March 2023, it released a ten-year plan for preventing conflict and promoting stability in Libya under the Global Fragility Act. Then in March 2024, it notified Congress of a plan to reopen the US embassy in Tripoli.

In its first seven months in office, Trump administration has built on this earlier work. In April, it conducted a ship visit to Libya with the USS Mount Whitney, the first by a US Navy vessel in more than fifty years. In July, it dispatched Boulos to both Tripoli and Benghazi, as well as to neighboring countries Tunisia, Algeria, and Egypt—presumably to look for avenues to advance peace and stability, which would pave the way for Libya’s energy resources to reach global markets.

All in the family

While skeptics criticized Boulos’s family connections or business background, he has used both to deliver a decisive advantage in diplomatic negotiations. Counterparts in the region—many of whom are not new to the influence of familial envoys—know that trusted ties mean access, and access means authority. Boulos has the latitude to promise and deliver creative solutions.

More than ever, Libya needs that authority and creativity. Boulos is well positioned to advance regional and global objectives regarding stability for Libya’s oil exports and broader economic development, countering global terrorist networks, and managing strategic competition with Russia.

Boulos has proven through his work with the DRC and Rwanda that he can leverage White House access to bring US national and global attention to complex problems. The sustainment of that effort and future progress for Libya hinges on the work of the career bureaucracy and uniformed military services to engage diplomatically and message consistently and cohesively. It also depends on their ability to build and maintain reliable security partnerships and deliver on economic promises for US private-sector investments. Such officials maintain long-standing relationships, regional knowledge, and functional expertise that the administration can use to its advantage, and they deserve the administration’s trust to carry forth such an agenda.

Four steps forward

Combining the advantages of Boulos and career US diplomats and military officers, there are four near-term actions the Trump administration can take to bolster its ties to Libya.

First, the administration should nominate an ambassador to Libya, and the Senate should swiftly confirm this selection to replace Richard Norland, who departed the post in 2022. Chargés d’affaires perform an incredible service and achieve remarkable things for US interests, but they cannot possibly achieve the same results or gain the same access as a Senate-confirmed personal representative of the US president.

Rather than continuing operations from Tunis, the next US ambassador to Libya should reopen the US embassy in Tripoli and maintain full-time operations in-country. The future ambassador’s presence would demonstrate a commitment to maturing the US-Libya bilateral relationship. Until then, the US government should maintain or accelerate the pace of in-country engagements, extending each of these in duration until the US official diplomatic presence is persistent, if not permanent.

Second, the administration should roll out a concerted public information campaign articulating its policy objectives for Libya. This information campaign should outline marching orders for US departments and agencies working on Libya. It should assure Libyan stakeholders of the US interest in improving US-Libya ties. And it should reinforce to global actors—both friend and foe—that the United States is invested in Libya’s stability and economic markets.

The Trump team has demonstrated finesse in managing information flows to the US and global media. For example, their information campaigns to US and global audiences on migration are nothing if not clear. A well-choreographed public affairs campaign articulating that the United States supports peace efforts in Libya and that the country is open for business will help reinforce other elements of US power operating in Libya in both the public and private sector. Such messages will also bolster confidence among Libyans that they can take steps toward the United States and policies that advantage the United States, while prompting allies and partners to consider aligning with US positions on Libya.

Third, the Department of Defense and Department of State should continue to incrementally increase US engagement and cooperation with defense forces and law enforcement in both GNU- and LNA-held territories. US forces have much to learn from engagements with their Libyan counterparts. Libyan forces have, for instance, tracked and countered terrorists in austere environments for decades with no reliable resourcing, and they have balanced the interests of strategic competitors waging influence campaigns within their borders.

Several US defense, law enforcement, and intelligence arms have strategic, operational, and tactical interests in collaborating with their Libyan counterparts to disrupt global terrorist operations and impede Russia’s efforts to destabilize the Sahel and Central Africa. The administration should resource such security investments. This does mean spending US taxpayer dollars overseas. But providing security cooperation and assistance to Libyan forces can pay dividends in countering terrorism, thwarting Russia’s bids for influence on the continent, and advancing regional stability for economic markets.

Fourth, the Trump administration, with Boulos as its point person, should use its connections in the US private sector, particularly in the oil and gas industry, to broker relationships with Libya’s business community. Libya’s oil wealth is unparalleled on the African continent, but the country’s conflicts have shuttered production and export facilities. Historically, Libya has been a wealthy and influential country, boasting elite security forces and influence throughout Africa and the Mediterranean, and there is extraordinary economic potential in the country that can help return it to that role in the medium and long term.

Moreover, the White House could leverage the Voluntary Principles Initiative to usher in respect for human and labor rights in Libya, thereby mitigating risk, creating value for Libyans, and advantaging the approaches of US companies. The Trump administration speaks the language of the private sector and brings enormous influence in this space that can catalyze deals, creating new economic opportunities. 

Trump and his team have admirably dedicated diplomatic weight to political and economic dealmaking in several global arenas. North Africa is hopefully its next target. Boulos’s family connection to Trump provides a tangible platform for brokering talks that can lead to greater stability and open economic pathways in Libya. The Trump administration should continue to support his personal engagement in Libya in pursuit of key US national interests in bolstering security and increasing economic prosperity.

At the same time, career diplomats and members of the US military, in support of the president’s policies, must be empowered and resourced to follow through with traditional tools of US national power to reinforce and execute prospective agreements. Absent such efforts to sustain diplomatic progress, the results of the administration’s peacemaking and dealmaking efforts will dissipate by the next news cycle. 

Maureen Farrell is a nonresident senior fellow in the Atlantic Council’s Scowcroft Center for Strategy and Security and vice president for global partnerships at Valar, a Nairobi-based strategic advisory and risk firm. She previously served as the deputy assistant secretary of defense for African affairs and director for African affairs at the US National Security Council. 

The post Boulos’s family ties could help advance US national security interests in Libya appeared first on Atlantic Council.

As the Trump administration recalibrates its policy toward Caracas, Colombia continues to grapple with instability caused in part by neighboring Venezuela. The number of Venezuelan migrants and refugees journeying to Colombia has plateaued, but the country’s resources are strained and its security situation is worsening as armed groups and criminal organizations continue to use Venezuela as a haven beyond the reach of the Colombian military. Meanwhile, the United States has cut foreign aid and centered its Venezuela policy around prisoner releases, deportations, and curbing migration. Despite differences in priorities and political approaches, opportunities exist for the United States and Colombia to engage in mutually beneficial actions that promote domestic and regional stability.

This issue brief, based on multiple consultations with US-Colombia Advisory Group members following a private expert briefing in December 2024, outlines the shifting dynamics in US and Colombian policy towards Venezuela. It makes recommendations for stronger US-Colombia coordination to promote stability in Venezuela and the broader region through diplomatic channels, security and intelligence cooperation, regional migration policy, and integration and regularization of migrants in Colombia.

Lucie Kneip is a program assistant at the Atlantic Council’s Adrienne Arsht Latin America Center, where she provides strategic direction to the center’s work on Venezuela and Colombia. She has supported the work of the Venezuela Solutions Group and the US-Colombia Advisory Group and has coordinated events with high-level policymakers, business leaders, and civil society members from across the Americas. Together with Geoff Ramsey, she leads the center’s work on individual sanctions in Venezuela and created the Venezuela Individual Sanctions Tracker.

Geoff Ramsey is a senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center. Ramsey is a leading expert on US policy toward Venezuela and has traveled regularly to the country for the last decade. Before joining the Atlantic Council, Ramsey directed the Venezuela program at the Washington Office on Latin America where he led the organization’s research on Venezuela and worked to promote lasting political agreements aimed at restoring human rights, democratic institutions, and the rule of law.

The Atlantic Council’s US-Colombia Advisory Group is a nonpartisan, binational, and multi-sectoral group committed to advancing a whole-of-society approach to addressing the most vital policy issues facing the US-Colombia relationship—with a recognition of the broader implications for bilateral interests across the region more broadly.

At its founding in 2017, the Advisory Group was co-chaired by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). Upon Blunt’s retirement, Senator Bill Hagerty (R-TN) assumed the honorary chairmanship alongside Cardin from 2023 until 2024.

Sep 29, 2021

US-Colombia Advisory Group

The Atlantic Council’s US-Colombia Advisory Group, is a nonpartisan, binational, and multi-sectoral group committed to advancing a whole-of-society approach to addressing the most vital policy issues facing the US-Colombia relationship—with a recognition of the broader implications for bilateral interests across the region more broadly.

Issue Brief Jul 10, 2025

Two US policy options for Venezuela: Shaping reform vs. ‘maximum pressure’ toward regime collapse

By Venezuela Solutions Group

The White House faces a choice: Should it use sanctions leverage to try to extract concessions from Nicolas Maduro on energy security, migration, and democratic reforms? Or should it bet on a return to “maximum pressure” in the hopes of precipitating a transition in Caracas?

Democratic Transitions Energy & Environment

New Atlanticist Mar 26, 2025

An ‘America first’ approach to Venezuela is taking shape

By Geoff Ramsey

US tariff threats against countries importing Venezuelan oil seem geared toward extracting concessions from strongman leader Nicolás Maduro.

Economy & Business Energy Markets & Governance

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

The post How the US and Colombia can tackle crime, migration, and fallout from Venezuela’s crisis appeared first on Atlantic Council.

Details of the deal

The deal, which succeeded in easing trade tensions and averted a tariff war, places a 15 percent base tariff on most EU goods entering the United States, while select goods that Romania trades in (including aircraft, chemicals, pharmaceuticals, and semiconductor equipment) fall under a zero-for-zero tariff agreement or revert to pre-January tariff levels. In return, the EU has agreed to buy US products—including $750 billion worth of energy—and invest $600 billion in the United States. The terms have led many in Europe to worry that they disproportionately favor US interests, disadvantage EU industry, and expose member states to economic risks from reduced export competitiveness, price pressures, and increased US competition within the EU market.

For Romania, the risks from the deal lie less in the direct exposure of its firms to the US market and more from the country’s deep integration within European supply chains. The United States accounts for less than 2 percent of Romania’s total trade, while over 70 percent is with EU partners. Key Romanian exports, including electrical and electronic equipment, vehicles and machinery, depend heavily on close ties with major Western European manufacturers.  If increased US tariffs cause EU exporters lose ground in the US market, Western European firms may be forced to cut back production or rethink their sourcing strategies, and Romanian inputs could be displaced from regional networks. Moreover, EU firms could face additional pressure if US producers outcompete them in the single market due to fewer tariffs and regulatory hurdles. 

To make matters trickier, EU producers are still grappling with high energy prices, which impact their ability to remain competitive in energy-intensive industries. Liquefied natural gas (LNG) costs significantly more than pipeline gas, and it now accounts for over 50 percent of total EU gas imports, compared to just 23 percent in 2021. Moreover, US LNG, which is generally more expensive than LNG from any other supplier, accounts for 55 percent of EU LNG imports. Energy-intensive sectors in the EU face a clear competitive disadvantage against their US counterparts, which benefit from access to cheaper domestically produced natural gas. 

However, Romania can turn these challenges into advantages to stabilize and protect its economy and capitalize on growing demand for new opportunities in transatlantic trade.

Leveraging Romanian energy

With Romanian supply chains vulnerable to shifting global trade dynamics, Romania has a clear incentive to double down on developing its energy sector to buffer its economy against potential disruptions.

The EU’s $750 billion energy commitment under the trade deal underscores the importance of energy for both sides, as well as the urgent need for reliable and affordable energy in Europe as it moves away from Russian supply. The various zero-for-zero tariffs also encourage restructuring supply chains in energy-intensive industries, such as semiconductors, defense, aerospace, and critical minerals, which are central to strategic competition in the 21st century. These sectors will rely on both more efficient and modernized fossil fuel systems as well as domestically generated clean energy  to enhance long-term competitiveness and resilience and meet EU climate and diversification goals.

Romania is well positioned to meet these needs and to protect its own economic stability with its unique mix of energy assets and its location at the crossroads of key European energy routes. Its significant access to Black Sea gas reserves can complement US-sourced LNG imports from the United States and other suppliers that could link to EU markets through the Vertical Gas Corridor. Even as clean energy technology is developed to support the long-term goal of net-zero emissions, natural gas will continue to serve as a transition fuel that supports hard-to-abate heavy industry, strengthens energy security, and maintains industrial competitiveness. By investing in efficiency upgrades and affordable solutions for the supply, transportation, and infrastructure development of natural gas, Romania can expand its role in the energy market and stabilize its economy in the process.

Moreover, Romania is expanding its nuclear capacity with new conventional and small modular reactors, with support from US Export-Import Bank financing, US Trade and Development Agency grants, and partnerships with US firms. This approach aligns closely with the trade deal’s focus on nuclear technology within the EU energy purchase pledge and signals significant opportunities for Romania to deepen transatlantic cooperation and accelerate its nuclear development moving forward.

Further capitalizing on its energy resources, Romania is expanding its renewable capacity in hydropower, solar, wind, and green hydrogen, positioning itself to access EU financial support through the Green Deal and REPowerEU. This approach, which aims to surpass the EU target of 40 percent renewable energy consumption by 2030, promotes economic growth and job creation, modernizes its energy infrastructure, and develops integrated grids to support future electrification.

By leveraging its abundant energy resources and potential, Romania can play a critical role both domestically and within the EU, with far reaching impacts. By driving energy access, development, and security, Romania can boost overall production capacity and strengthen regional supply chains. It can also provide a sustainable foundation for growing its domestic energy-intensive sectors, especially its defense industry, a strategic priority given Romania’s role on NATO’s eastern flank. This would attract additional US and EU investment in Romanian military production, modernization, and mobility, which would further sustain the country’s economic stability.

Romania as a strategic energy hub

The US-EU trade deal reshapes the transatlantic economic playing field, and Romania must act decisively to turn expected challenges into long-term advantages. Increased competition and shifting supply chains within the EU present real risks. In response, Romania, with the EU’s support, should leverage its unique energy assets and strategic location, which offer a way to stabilize and grow its economy at a time of increased demand for reliable, regionally sourced, and clean energy. With a focused and proactive hybrid strategy for advancing nuclear, fossil, and renewable energy, Romania can transform this moment of uncertainty into a catalyst for sustainable growth as a multisource energy producer and exporter as well as a strategic energy transit hub.

Uliana Certan is a Program Assistant at the Atlantic Council Global Energy Center

Sign up for PowerPlay, the Atlantic Council’s bimonthly newsletter keeping you up to date on all facets of the energy transition

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

Staff

Uliana Certan

Assistant Director, European Engagement

Global Energy Center

Democratic Transitions Energy & Environment

EnergySource Jun 27, 2025

Strong currents, stronger alliances: Reinforcing the EU’s Black Sea energy strategy through transatlantic collaboration  

By Andrei Covatariu

The EU’s recently released Black Sea strategy will thrive only with robust transatlantic collaboration. This relationship will be crucial to stabilizing the region’s energy security, facilitating its energy transition, and ensuring that initiatives align with geopolitical and national security objectives.

Energy & Environment Energy Markets & Governance

EnergySource Oct 25, 2024

Hungary’s Russian oil deal threatens EU solidarity

By Sergiy Makogon

By striking a deal to resume Russian oil transit through Ukraine, Hungarian oil and gas company MOL undermines Europe’s collective action against Russia. The European Union must respond quickly and decisively with solidarity to close sanctions loopholes.

Financial Sanctions and Economic Coercion Geopolitics & Energy Security

Press Release Jun 30, 2025

Atlantic Council expands global presence with a new regional office in Bucharest

BUCHAREST, ROMANIA – JUNE 30, 2025 – The Atlantic Council, one of the most influential and globally active think tanks in the United States, announced today the opening of a new regional office in Bucharest. This new office will foster bilateral and transatlantic cooperation on key priorities including energy, security, infrastructure, economics, and advanced technology, […]

The post Energy is key to Romania’s trade resilience appeared first on Atlantic Council.

US policy toward Venezuela is at a crossroads, with a degree of uncertainty still hanging over the new administration’s approach. The White House faces a choice: Should the United States try to use sanctions leverage to obtain limited concessions from Maduro on energy security, migration, and democratic reforms? Or should it bet on a return to “maximum pressure” in the hope of deepening existing fissures among Venezuela’s ruling elites and hastening a more immediate transition?

This issue brief, informed by the Adrienne Arsht Latin America Center’s Venezuela Solutions Group, explores two options through which the Trump administration could adopt an “America First” policy towards Venezuela.

Option I: Shaping incentives for an economic and democratic opening

The Trump administration could leverage sanctions on individuals and the energy sector to attempt to push Maduro toward political and economic reforms that advance the administration’s stated interest in Venezuela accepting deportees from the United States. This would involve shaping incentives for Maduro and his inner circle to extract concessions that could move Venezuela toward a gradual opening.

Policy recommendations:

• Adapt the first Trump administration’s Democratic Transition Framework to lay the foundations for creative power-sharing arrangements.
• Advance migration policy cooperation and refrain from exacerbating outbound migration.
• Issue conditional sanctions licenses in exchange for economic and political benchmarks.
• Expand the footprint for US and Western-aligned energy firms in Venezuela while displacing Russia, China, and Iran.

Option II: Broad pressure to advance regime collapse

Alternatively, the Trump administration could revise its previous policy of maximum pressure, especially if Maduro does not cooperate with policies to reduce outbound migration and the influence of US geopolitical rivals. This involves using pressure mechanisms including sanctions, indictments, and law enforcement to attempt to provoke a fissure in Maduro’s inner circle. Divisions in Caracas could break the government’s hold on power and incentivize a democratic transition in which a new coalition in power is more willing to work with the United States on migration and security interests.

Policy recommendations:

• Remove all licenses allowing oil companies to operate in Venezuela.
• Pursue investigations and prosecutions against government officials tied to money laundering, drug trafficking, and other criminal activities.
• Tighten enforcement of secondary sanctions on Beijing, Moscow, and Tehran- based organizations.
• Ramp up individual sanctions.
• Bolster the Venezuelan democratic opposition and civil society.

The Adrienne Arsht Latin America Center’s (AALAC) Venezuela Solutions Group focuses on advancing a peaceful, democratic solution to Venezuela’s crisis as well as furthering policy coordination between the United States and allies in Europe and across the Americas.

Jul 24, 2024

Venezuela Solutions Group

The Adrienne Arsht Latin America Center’s Venezuela Solutions Group is a diverse group of experts and practitioners from Venezuela, the United States, Latin America, and Europe, brought together to advance the conversation on how to reach a peaceful, democratic, and negotiated solution to the crisis in the South American country. The group comprises former government officials, civil society leaders, private sector leaders, humanitarian voices, economists, and leading experts on Venezuela who work to promote debate and propose actionable and concrete policy recommendations in order to advance policy innovation in addressing the situation in Venezuela. 

New Atlanticist Mar 26, 2025

An ‘America first’ approach to Venezuela is taking shape

By Geoff Ramsey

US tariff threats against countries importing Venezuelan oil seem geared toward extracting concessions from strongman leader Nicolás Maduro.

Economy & Business Energy Markets & Governance

Trackers and Data Visualizations Mar 3, 2025

Venezuela sanctions tracker: Who is the international community sanctioning in Venezuela?

By Lucie Kneip, Geoff Ramsey, Ilona Barrero

International actors including the US, Canada, and the EU have imposed sanctions on individuals responsible for acts of corruption, human rights violations, and the breakdown of democratic rule in Venezuela. How aligned are these countries on sanctions, and where do gaps exist?

Americas Europe & Eurasia

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

Learn more

The post Two US policy options for Venezuela: Shaping reform vs. ‘maximum pressure’ toward regime collapse appeared first on Atlantic Council.

The post Tannebaum quoted in Bloomberg on the policy of allowing China to purchase Iranian oil appeared first on Atlantic Council.

The post Donovan and Nikoladze cited in CNBC on Chinese oil imports avoiding Western banks appeared first on Atlantic Council.

Published on June 17 just hours after Russia carried out one of its deadliest missile and drone attacks on Kyiv, the EU’s new draft regulation on phasing out fossil fuel imports is arguably long overdue. If adopted, it would deprive the Kremlin of vital budget revenues and potentially prevent Russia from fracturing Europe’s unity through energy blackmail.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

The EU’s draft regulation lays out several key steps such as a ban on signing new contracts. It calls for phasing out spot and long-term supplies between 2026 and the beginning of 2028, while prohibiting the provision of services at EU terminals for liquefied natural gas (LNG) to customers from Russia or controlled by Russian undertakings.

Importantly, the current draft also includes tough enforcement and transparency measures that would oblige importers of Russian gas to submit all information needed in order to evaluate risks for gas trading and supply security to the European Commission. In line with the proposals, customs authorities would be given greater powers to monitor imports.

The draft regulation aligns with a proposal recently endorsed by the European Parliament to impose tariffs on fertilizers and agricultural products originating in Russia and Belarus. While these measures are underpinned by trade law, which may insulate them from a potential veto from Kremlin-friendly gas buyers such as Hungary and Slovakia, it may take at least another six months to implement them. Even after adoption and implementation, there would likely still be lingering questions regarding the penalties that may be imposed in case of non-compliance.

Earlier in June, the EU presented its eighteenth package of sanctions targeting Russia. This latest package included a ban on any EU operators engaging directly or indirectly in transactions regarding Russia’s controversial Nord Stream gas pipelines. It also proposed to lower the oil price cap from $60 to $45. The slashing of the price cap would inflict significant damage on the Kremlin’s war economy, which is heavily reliant on oil exports. However, the escalating conflict between Israel and Iran, which lifted oil prices more than 10 percent in recent days, may help Russia rake in further income.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

While the EU’s latest sanctions package and proposed Russian fossil fuel import phaseout are welcome steps, these measures would still leave sufficient flexibility for the Kremlin to export oil, LNG, and oil products to the rest of the world. Since Russia’s full-scale invasion of Ukraine began in February 2022, Moscow has generated fossil fuel revenues of close to $1 trillion, with only a quarter of this revenue coming from the EU.

The remaining $700 billion has come from sales to large importers such as China, which has been buying oil or oil products often transported by Russia’s shadow fleet of tankers. To clamp down on these grey zone exports, there is a need for a far more determined approach to limit Russia’s international oil and gas trade.

Legislation proposed by US Senators Richard Blumenthal and Lindsey Graham may be the only decisive measure that could tear down Russia’s war machine and safeguard Ukraine’s security. The bill, which benefits from bipartisan support and a supermajority of 84 Senate cosponsors, aims to impose a 500 percent tariff on imported goods from countries such as China or India that buy Russian oil, gas, uranium, and other products.

This bill would send a hard-hitting message not only to Russia but also to any other country which may now feel empowered to attack other sovereign nations without fear of retribution. However, approval ultimately rests with US President Donald Trump. So far, he does not appear ready to give the green light.

For more than a decade, Russia has been using oil and gas exports to pay for its war of aggression against Ukraine, fracture European unity, and consolidate ties with fellow authoritarian regimes around the world. The European Union and United States have prepared measures that could dramatically weaken Russia’s energy weapon and undermine Putin’s war machine. The question now is whether they have the political leadership to proceed.

Dr. Aura Sabadus is a senior energy journalist who writes about Eastern Europe, Turkey, and Ukraine for Independent Commodity Intelligence Services (ICIS), a London-based global energy and petrochemicals news and market data provider. Her views are her own.

Further reading

UkraineAlert May 29, 2025

Fiber optic drones could play decisive role in Russia’s summer offensive

By David Kirichenko

Russia’s emphasis on fiber optic drones is giving it a battlefield edge over Ukraine and may help Putin achieve a long hoped for breakthrough in his coming summer offensive, writes David Kirichenko.

Conflict Defense Industry

UkraineAlert May 29, 2025

UN probe: Russia’s ‘human safari’ in Ukraine is a crime against humanity

By Peter Dickinson

UN investigators have concluded that a coordinated Russian campaign of deadly drone strikes targeting civilians in southern Ukraine’s Kherson region is a crime against humanity, writes Peter Dickinson.

Conflict Drones

UkraineAlert Jun 17, 2025

Russia and Ukraine are locked in an economic war of attrition

By Anders Åslund

As the Russian army continues to wage a brutal war of attrition in Ukraine, the two nations are also locked in an economic contest that could play a key role in determining the outcome of Europe’s largest invasion since World War II, writes Anders Åslund.

Conflict Corruption

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post New EU and US energy sanctions are needed to disarm Putin’s war machine appeared first on Atlantic Council.

What transatlantic energy cooperation looks like under America First

The panel “Partnership for prosperity: Can the US and Europe both win in the America First era?” addressed the evolving landscape of transatlantic relations, focusing on both the challenges and opportunities that lie ahead. The discussion was moderated by Olga Khakova, deputy director for European energy security at the Global Energy Center (GEC), panelists included Amb. Richard Morningstar, founding chairman of the GEC and former US ambassador to the European Union (EU), Torgrim Reitan, chief financial officer of Equinor, Toby Rice, president and chief executive officer (CEO) of EQT, and Klaus Wiener, member of the German Bundestag.   

A central theme throughout the conversation was the enduring connection and shared values between the EU and the United States, grounded in a long-standing alliance. Wiener affirmed “we are very strong allies,” while Reitan added, “we belong together.” These comments underscored the historical and strategic ties between the United States and Europe. 

While acknowledging the relationship’s current difficulties, all panelists agreed on the need to find common ground and foster a forward-looking agenda rooted in mutual interests. The panelists raised liquefied natural gas (LNG) as a focal point of transatlantic cooperation. “Europe needs security and flexibility and US LNG can provide for that,” said Rice, highlighting LNG as a central issue in US-EU negotiations. 

Morningstar emphasized that other energy technologies, including nuclear and fusion, should also be considered. He noted that the development and deployment of these technologies will depend not only on political will but also on private sector engagement. When asked about the future, Reitan responded, “we need to build predictability and overcome barriers.”  

Nuclear energy has global momentum. What’s next?

Jennifer T. Gordon, director of the GEC’s Nuclear Energy Policy Initiative, moderated “The role of nuclear energy in global energy security,” a discussion featuring Sama Bilbao y León, director general of the World Nuclear Association, Aleshia Duncan, deputy assistant secretary for international cooperation at the US Department of Energy’s Office of Nuclear Energy, Amb. Georgette Mosbacher, co-chair for Three Seas programming at the Atlantic Council Europe Center and former US ambassador to Poland, Jeremy Pocklington CB, permanent secretary at the United Kingdom’s Department of Energy Security and Net Zero, and Robert Rudich, chief business development officer of Synthos Green Energy. 

Gordon began by highlighting that the conversation takes place at an exciting time for nuclear both globally and in the United States, where four recent nuclear power-focused executive orders demonstrate “an ambitious agenda for civil nuclear partnerships.” Duncan detailed US government efforts to ensure those partnerships succeed. Nuclear power is “a 100-year relationship,” Duncan said, noting the pitfalls inherent with such timescales.  

Bilbao y León provided a global tour of the nuclear sector’s momentum, citing reversals of opposition to nuclear power in European states and at the World Bank, a long list of projects underway across the Global South, and efforts to lead in the technology by both the United States and China. Bilbao y León lauded the progress of a 31-nation “coalition of the ambitious,” which is mobilizing to realize the COP28 objective of tripling global nuclear capacity by 2050. 

Pocklington focused on the United Kingdom, which is building new conventional and advanced reactor capacity in addition to prolonging and maximizing existing nuclear power generation. “The single greatest challenge,” he said, “is figuring out what we can do to speed up the process,” citing financial innovations that the country is pioneering to make projects a reality. 

The next two panelists discussed US nuclear partnerships in Poland and Central Europe. Mosbacher praised Poland’s foresight in reducing its reliance on Russian gas even before the full-scale invasion of Ukraine. Today, she argued, US policymakers must exercise similar foresight in fostering partnerships to keep pace with nuclear-exporting adversaries in Russia and China: “if we don’t scale up fast, we will be left behind.” Rudich offered a private sector perspective, elaborating on Polish firm Synthos Green Energy’s efforts with North American partners to build advanced reactors that will eventually “go beyond Poland and construct the Green Wall.” This zone, stretching from the Baltic states to the Black Sea, would use nuclear power to eliminate dependency on Russian energy. Helping to enact this ambitious plan, Rudich argued, is profoundly in the US national interest: “energy dominance,” he said, “means exports.”  

Gordon concluded the conversation by asking what participants would like to see changed in nuclear energy before the 2026 Global Energy Forum. As stakeholders increasingly realize “energy security is national security,” Duncan suggested, “we should fund it as such.” Duncan and Bilbao y León both emphasized the importance of leadership for the deployment of reactors at scale. Rudich concluded by stressing the need for funding to translate into action: “we need to start doing projects and move away from talking about doing projects.” 

Can quick wins in critical minerals reduce reliance on China?

The final panel of the Global Energy Forum, “Critical minerals, critical decisions: Quick wins in critical mineral supply chain partnerships,” was moderated by Audrey Hruby, Atlantic Council Africa Center senior advisor, and featured Helaina Matza, chief strategic development officer of TechMet, Stephen Rowland, head of North America copper at Glencore, Reggie Singh, director of the US Department of State Bureau of Energy Resources’ Critical Minerals and Energy Technology Office, and Imad Toumi, chairman and CEO of Managem. 

Hruby began by elucidating the central goal of the conversation: “in a long-term sector like mining, we want to look for quick wins.” The fundamental challenge? “We rely too much on one major player for all our critical minerals: China,” continued Singh, who elaborated on how the US government is working to initiate international partnerships that diversify supply while meeting rapidly rising minerals demand.  

Matza, delivering a financial sector view of government initiatives, commended bipartisan efforts to “operate a little more like US Government, Inc.,” and make use of unique capabilities among partners to bring more supplies to market. Toumi, who runs a Moroccan minerals company, shared an African perspective: “we no longer want to export raw materials; we need to refine.” He provided an overview of his company’s efforts to work with African partners to build holistic supply chains able to compete with China.  

Rowland zeroed in one key mineral—copper—which is faced with spiking demand from electrification and data centers. Despite this challenge, Rowland suggested resource availability is not the issue: “it’s hard to say if the bottleneck is copper or power,” pointing out the inadequate scale of extraction. 

Hruby concluded by posing a rapid-fire question to the panel: “what can we achieve in 24 months rather than five-to-ten years?” Participants responded with measures such as pushing forward shovel-ready projects, fostering innovation and recycling, and legislative changes in the United States and globally to fast-track development. 

 
Equinor and EQT are sponsors of the Atlantic Council’s Global Energy Forum. Managem is a sponsor of the Atlantic Council’s Africa Center. More information on Forum sponsors can be found here.  

Elena Benaim is a nonresident fellow with the Atlantic Council Global Energy Center. 

Paddy Ryan is a former assistant director with the Atlantic Council Global Energy Center. He is a senior writer/editor at the University of California Institute on Global Conflict and Cooperation. 

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

Read more

Fellow

Elena Benaim

Nonresident Fellow

Global Energy Center

Energy & Environment

Former staff

Paddy Ryan

Global Energy Center

Energy & Environment Energy Transitions

EnergySource Jun 17, 2025

The energy system is more complex than ever: Navigating AI, competitiveness, and growth

By Elena Benaim, Paddy Ryan

The Atlantic Council’s flagship Global Energy Forum opened today in Washington, DC, bringing together top energy and policy leaders at a critical moment for global energy strategy. These experts and policymakers weighed in on the increasingly complex landscape of energy policies amid intense competition to win the artificial intelligence (AI) race, rising geopolitical tensions, and divergent national priorities.

Africa Americas

EnergySource Jun 2, 2025

MDBs must finance nuclear power—or Russia and China will

By Juzel Lloyd

The growing influence of Russia and China in global nuclear energy financing threatens to reshape the future of energy geopolitics. To address this, multilateral development banks must recognize nuclear energy as a vital tool for expanding energy access, and modernize outdated policies to support deployment.

China Energy & Environment

EnergySource Jun 16, 2025

US global leadership in the age of electricity

By Robert F. Ichord, Jr.

Amid shifting geopolitics and the emerging “age of electricity,” the United States has an opportunity to assert global leadership in energy and security. Through foreign policy, the Trump administration can leverage US strengths in natural gas, nuclear power, and emerging energy technologies to engage allies in building a secure and resilient global electricity system.

China Energy & Environment

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Energy security is only achievable through global partnerships appeared first on Atlantic Council.

Global Energy Forum

The tenth Atlantic Council Global Energy Forum will be held June 9-10, 2026 in Washington, DC. Please check back regularly for updates on our programming.

“Our greatest rival is China, I would argue, and they now in many cases dominate the refining of critical minerals, in addition to the extraction,” said US Senator John Hickenlooper (D-CO) at the 2025 Global Energy Forum on Wednesday. 

“We definitely in this country need to be able to demonstrate a certain capacity to deliver and refine critical minerals, but we cannot do it by ourselves,” said Hickenlooper, emphasizing the importance of partnering with US allies on energy security. “We have an alignment of countries that share certain values and have historically worked very well together despite differences.”

The discussion came amid debate in the US Senate on the One Big Beautiful Bill Act, which would phase out many clean energy tax credits and investment incentives.

Below are more highlights from this discussion, which was moderated by David L. Goldwyn, chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group. 

Big bill, big debate

• “As the one scientist in the Senate,” said Hickenlooper, a geologist by training, “I hold myself to account that we’ve got to do a better job of explaining” to his Republican colleagues “why there needs to be a sense of urgency around climate change.”
• Hickenlooper said he supports an “all-of-the-above” approach to US energy policy, including producing and exporting liquefied natural gas. “But at the same time, climate change is real,” he said, adding that “we’ve also got to be willing to push every source of energy we can that is cleaner.”
• “It’s not just wind and solar, it’s geothermal” and hydrogen power that would be negatively impacted by the One Big Beautiful Bill Act’s revocation of tax cuts and incentives, Hickenlooper said. “All these different sources of energy are going to get sliced to pieces,” he said, warning that this would cost jobs and fuel inflation.
• However negotiations in Congress end up, Hickenlooper said that the bill “looks almost certain to abandon many billions of dollars that are invested in wind, solar, [and] batteries.” He added that he hoped “we’ll be able to balance that out with innovations like what we’re seeing with geothermal.”

An “alignment of self-interest” on mining

• When it comes to permitting mining operations in the United States, said Hickenlooper, “there should be an alignment of self-interest that we’ve got to go faster.”
• “We don’t have the luxury to litigate and slow down these types of investments,” he said, citing efforts by environmental groups to slow the development of mines. “If we’re going to be able to address climate change successfully, we need to develop mines faster, and we’ve got to make sure that we provide a level of environmental certainty.”
• The United States hasn’t passed “a real mining law” in over one hundred years, said Hickenlooper, who called this situation “pathetic, because that means that we don’t have a framework that the rest of the world can use. Usually, we take the environmental progress we make in this country, and the rest of the world follows us.”

The future of US scientific leadership

• Domestic decisions on investments in science have an impact on US partnerships, Hickenlooper noted. Cutting back on investments in scientific research “corrodes the trust that many in the scientific community have in how America has always led the way in research and development.”
• “What we need is more of our young people to get involved in technology and science,” Hickenlooper said, noting that China produces significantly more mining engineers than the United States. China is “creating the workforce that’s going to help them lead in critical minerals,” he said, adding that the United States needs to invest in creating more “entry points” for young Americans to become interested in pursuing scientific careers.

Daniel Hojnacki is an assistant editor at the Atlantic Council.

Watch the full event

The post Senator John Hickenlooper on critical minerals, mining, and the future of clean energy appeared first on Atlantic Council.

Global Energy Forum

The tenth Atlantic Council Global Energy Forum will be held June 9-10, 2026 in Washington, DC. Please check back regularly for updates on our programming.

On Tuesday, the European Commission unveiled a plan to entirely stop its use of Russian oil and gas. For Espen Barth Eide, the foreign minister of Norway (which neighbors the European Union and is the bloc’s top gas supplier), the plan marks a “significant change.”  

At the first day of the 2025 Global Energy Forum, hosted by the Atlantic Council’s Global Energy Center, Barth Eide said that the plan is good for “security policy,” “strategic autonomy,” and the “climate transition.” 

“By investing in renewables,” while diversifying from Russian oil and gas, “you are both cleaning up your energy system, but at the same time, you are also providing more energy independence from powers like Russia,” he explained. 

The plan, which would still need to be passed by the European Parliament, is one example of the “changing geopolitics of energy in Europe,” Barth Eide said. “The geopolitics of energy is important for foreign ministers . . . because it is so central to power dynamics.” 

“Everything is connected,” he added. “The degree to which you can create energy independence is so much related to security policy.” 

Below are more highlights from the conversation, moderated by Atlantic Council President and Chief Executive Officer Frederick Kempe, which also touched upon the upcoming NATO Summit, Norway’s relationship with the United States, and support for Ukraine. 

True independence takes energy independence 

• “The most daunting challenge is to make sure that Ukraine emerges from what’s happening now as a free, independent, sovereign nation that can make its own choices. And that is also about energy independence,” Barth Eide said.  

• He noted that Oslo has supported Kyiv with funding for gas purchases as well as help building a more resilient energy system. “Ukraine needs missiles and drones and weapons technology, but they also need to keep the economy alive, and that can only be done with a reasonable access to energy,” he noted. 

• Barth Eide said he thinks Russian President Vladimir Putin needs to be squeezed harder by European allies—as Norway works with its neighbors on controlling Russia’s sanctions-busting “shadow fleet”—and that he would “welcome stronger sanctions also from the US side.” 

• Barth Eide said that Europe understands it should do more to support Ukraine; “but it’s paramount that the US is still in, even if there’s sort of a burden shifting,” he said. 

Divide and conquer 

• Ahead of next week’s NATO Summit, Barth Eide said that he believes allies are “moving towards consensus” on a new spending goal of 5 percent of gross domestic product on defense—with 3.5 percent focused on traditional defense spending and 1.5 percent earmarked for defense-related spending such as ports and airports. “The majority of NATO is moving there, and I think with the good spirit of the meeting, it will happen,” he said. 

• Reflecting on US President Donald Trump’s demands for Europe to spend more on defense, Barth Eide said “Europe should pay more for its own defense and invest more in its own defense,” in part because doing so means that the United States can spend more of “its mental bandwidth” on the Indo-Pacific.  

• A US pivot could still redound to Europe’s benefit. Russia turning to North Korean troops or Iranian drones for help in Ukraine, Barth Eide explained, shows that “any idea that you can separate” these theaters “is simply wrong.” 

• “I always appreciate when the Atlantic Ocean is narrow in a political sense,” the foreign minister said. “And if we move away from each other, we have to try to get back to where we were.” 

Wishing for Washington 

• The foreign minister, who was scheduled to visit US Secretary of State Marco Rubio on Wednesday, said that Norway’s partnership with the United States is “very strong” and has not deteriorated with the current US administration. “There are decisions being made here on global issues that I do not always agree with, I don’t think I’m alone in that. But our partnership is strong and growing.” 

• Barth Eide pointed to US and Norwegian cooperation on fulfilling Europe’s gas demand. “I think there is a rather deep alignment because we have a shared interest in assisting our allies and friends in Europe in not returning to that dependency on Russia,” he said. 

• He added that Norway is “very much eager” to “see more cooperation” on carbon capture and storage, in addition to rare earths and critical minerals, which are important inputs for green technologies. “We need to invest now in how we make sure that some of these sources are controlled by Western friends and allies,” he argued. 

Katherine Golden is an associate director on the Atlantic Council’s editorial team.  

Watch the full event

The post Norwegian Foreign Minister Espen Barth Eide: Ukraine must emerge from war independent—including its energy appeared first on Atlantic Council.

Global Energy Forum

The tenth Atlantic Council Global Energy Forum will be held June 9-10, 2026 in Washington, DC. Please check back regularly for updates on our programming.

As the 2025 Global Energy Forum convened on Tuesday in Washington, DC, just blocks away at the White House, national security officials were mulling over the US response to the war between Israel and Iran.  

“Right now, Iran has a choice,” Brett McGurk, distinguished fellow at the Atlantic Council and former White House coordinator for the Middle East region, said at the Forum.  

“The White House offered a deal to Iran about six weeks ago . . . Iran not only did not really respond to that; it actually escalated its nuclear program in the face of this,” McGurk said, pointing to activities at the Fordow nuclear site. 

For McGurk, if Iran accepts the nuclear deal, “this crisis would be over.” But if it doesn’t, it would be “looking at the possibility of a US strike on Fordow.”

When it comes to escalation in the Middle East, Helima Croft—global head of commodity strategy and MENA research at RBC Capital and a member of the Atlantic Council Board of Directors—said that “the risk of this spilling over into energy is low. But it’s not zero.”  

Below are more highlights from the conversation, moderated by William F. Wechsler, senior director of the Rafik Hariri Center & Middle East programs at the Atlantic Council, where Croft and McGurk also talked about the United States’ response options and the region’s future.

The objectives 

• McGurk said that if he were in the Situation Room, he would list three objectives for the commander in chief: The first is to protect Americans and defend Israel—which would involve “surging defense interceptors.” The second is to “contain this to Israel and Iran” and “avoid a broader regional escalation.” The third, McGurk explained, is to work with Israel on succeeding in their objectives: “dismantlement of the nuclear program and the missile program.” 

• McGurk said that what happens in the next week “is potentially quite decisive,” because it could weaken Iran’s influence in the region. That, he said, would set “conditions for a much more peaceful, integrated Middle East that we all want.” 

• “You talk about a decisive historical period: We’re living in it,” he said. 

The options

• McGurk said that a military response has previously had “massive risk” associated with it, but “Iran has made a series of fateful strategic miscalculations” since October 7, 2023, reducing those risks. 

• One such risk was the possibility of retaliation from an Iranian proxy group, such as Hezbollah; but that is “no longer a threat,” McGurk said, with Hezbollah indicating that it does not want to be involved in this latest exchange of strikes. 

• Another risk was Iran’s air defense, including its use of Russian air defense systems, but that risk has faded as “Israel has complete air supremacy” over Iran. “So the window of availability for a military option is now very open,” McGurk said. 

• He added that he could see the US administration using the threat of this military option to “try to get a deal.” But if that deal does not come to fruition, “then we have to be prepared to actually do the strike,” McGurk added. “And I think you do have to back it up.” 

• “The worst case here would be to leave Iran with that Fordow [site] and ten cascades [of advanced centrifuges] intact,” McGurk said. “So it’s a deal or it’s a military strike.”

The impact

• Croft said that the market is “very sanguine” about the energy risks associated with the conflict. “We have ample supply on the market right now,” she noted.  

• If the United States decides to launch an attack on Fordow, Croft said, there would be “a little pop” in prices. But the bigger concern among market players is whether Iran plans to “internationalize” the costs of this war, such as by rallying its proxy groups in targeting tankers and shipping corridors such as the Strait of Hormuz. 

• That could yield some temporary disruption. “I don’t think the market would be prepared for the export infrastructure being struck,” she said. 

• She added that there is also concern “about risks to other countries’ energy facilities where they may not have taken the necessary steps to fortify those facilities.” 

• Until the war inflicts a massive impact on oil supply, Croft said she would not expect a “preemptive surge” of barrels from the Organization of the Petroleum Exporting Countries (OPEC). “They are already unwinding a voluntary cut,” she said. “OPEC has made it pretty clear: They’re not going to fill a gap in the market until one emerges.” 

• Croft added that there is much at stake in achieving a stable, prosperous Middle East region, as governments continue to build more resilient societies and to diversify their economies. “Having a stable security environment is so important for the millions of young people in the region whose futures really rest on everything that these governments are trying to undertake,” she said. 

Katherine Golden is an associate director on the Atlantic Council’s editorial team. 

Editor’s note: RBC Capital Markets is a sponsor of the Atlantic Council’s Global Energy Forum. More information on Forum sponsors can be found here. 

The post What comes next in the Iran-Israel war, from a US response to energy impacts appeared first on Atlantic Council.

Global Energy Forum

The tenth Atlantic Council Global Energy Forum will be held June 9-10, 2026 in Washington, DC. Please check back regularly for updates on our programming.

Event transcript

Uncorrected transcript: Check against delivery

SULTAN AL JABER: Good morning, everyone. It is indeed a great pleasure to be back here in Washington, DC. And it’s a real pleasure to see so many friends, colleagues, and partners at this very important forum.

Let me begin by thanking my dear friend and partner Fred Kempe for his commitment, and his guidance, and his support throughout the years. And allow me also to thank his team for working very closely with us and for hosting this very important and relevant forum. With your focus on energy security, economic competitiveness, and global prosperity, this forum could not be more on point.

Colleagues, before I continue allow me to address the evolving situation in our part of the world. The United Arab Emirates stands for dialogue, for de-escalation, and diplomacy. We call on all parties to show restraint. And we reaffirm our belief in peace over provocation, calm over confrontation, and progress through partnership, and only partnership.

Colleagues, moments like these remind us that energy is not just the engine of progress. It is a cornerstone of peace, stability, and ensuring prosperity. And as we say—or, as we stay committed to dialogue and diplomacy, we must also stay focused on the opportunities that lie ahead. Because while the world seeks calm, a new chapter in human progress is being written. And this chapter is defined by two simple truths. The first is that artificial intelligence is driving the next stage of evolution. And the second is that AI is driven by energy. In short, AI supremacy is essentially an energy play.

And the race for AI is not just about code. In fact, it’s about gigawatts. Every advance in AI uses more energy. A single ChatGPT query uses ten times the energy of Google search. AI generated video, one hundred times more. And we are now entering the era of the one gigawatt hyperscaler, where a single datacenter consumes as much electricity as a city of the size of Pittsburgh. And over the next five years, the US alone will need anywhere between 50 and 150 gigawatts of new installed capacity.

And meeting this demand is not just a technical challenge. It is a once-in-a-generation investment opportunity. In fact, it is an opportunity that will require a system-wide shift, with energy, technology, finance, and policy all operating in sync. That’s why yesterday, and here in Washington, DC, and in partnership with The Atlantic Council and MGX, we brought together leaders from all these relevant sectors to the second ENACT forum. And we do this in an effort to answer the fundamental and pressing questions, and to help build an integrated roadmap for a systemwide action.

Our first recommendation may seem obvious, but in my view, it is very urgent: In the age of hyperscalers, we must hyperscale energy. That means reliable baseload like gas, renewables backed by storage, breakthroughs from [small modular reactors] to fusion, and perhaps most critically a pragmatic pause on early retirements of existing power plants while we bring back nuclear to be part of mainstream energy mix.

Power generation is only half of the story, though. Getting the power to the end user is the other half. And in fact, it’s the most—it’s the more complex part of that equation. The fact is, you can’t run tomorrow’s technology on yesterday’s grid. And many—and that’s a fact—many of our grids were built for a completely different century and a completely different circumstance.

Wait times for key components like transformers and turbines can take more than three years to make them available. And this is not just a supply chain problem; it is a bottleneck to industrial growth, and that’s how we should view it. It is a bottleneck to economic prosperity and to industrial growth.

And solving it will require an investment surge of up to 300 billion US dollars annually in the US alone. We must de-risk major capital investments, and here policy can and must help. Policy cannot hold up progress. And we must take the gridlock out of the grid.

Currently, there are about 2,600 gigawatts of planned capacity around the world waiting for a proper grid connection. We must fast-track permitting and unlock that great potential. Let us train the one million electricians needed for a twenty-first-century power system. And let’s not forget that AI can unlock its own energy challenge by managing peaks and dips in demand, optimizing grid flows, and supercharging operational efficiency.

Friends, colleagues, and partners, the opportunity ahead is massive, but the window to act is very narrow. And the key to success is cooperation and true partnership. That is why the UAE is wasting no time in taking our powerhouse energy partnership with the US to the next level.

Over the next ten years we plan to grow our US energy investments sixfold, from the existing 70 billion US dollars to 440 billion US dollars. And we will do this through XRG, our international energy investment company. We are an anchor investor already in the largest LNG plant here, in Texas, and we produce specialty chemicals across the United States of America through Covestro and Nova Chemicals. And through Masdar, we have developed 5.5 gigawatts of renewable energy and storage capacity from coast to coast, and we are just getting started.

And to help harness our ambition, we just opened and activated our XRG-Masdar offices here in Washington, DC. Because, for us, the United States is not just a priority; it is more of an investment imperative. This is not just capital. It’s conviction in a shared future.

Partners, colleagues, and friends, to realize the full power of AI we must give it the power it needs. And this starts with a coordinated roadmap, a holistic approach, a comprehensive, cohesive roadmap that can be applied locally and scaled globally. We need policy that clears the path, infrastructure that carries the load, and investment that meets the moment. AI and energy are the twin engines of human progress—two engines, one direction, fast-forward into the future. And I’m here to invite you all to help shape that future together. I thank you.

Watch the full event

The post The AI race ‘is not just about code,’ it’s ‘about gigawatts,’ says the UAE’s Sultan Al Jaber appeared first on Atlantic Council.

The post Donovan cited in Newsweek on EC proposal to lower price cap on Russian oil appeared first on Atlantic Council.

The post Donovan quoted in China Daily on potential US reactions to proposed EC sanctions on Russia appeared first on Atlantic Council.

The roots of scarcity

Turkmenistan’s vulnerability to water stress is the highest in Central Asia, a precarious position resulting from a complex interplay of factors. Much of the country’s water infrastructure is a relic of the Soviet Union, including open canals and irrigation ditches that are tragically inefficient. Estimates suggest that anywhere between 30 percent and 60 percent of the water transported through these systems is lost to evaporation or seeps into the sandy soil before reaching its intended destination. These physical conditions are compounded by systemic mismanagement. A cohesive national strategy for water conservation and distribution remains elusive, hampered by a lack of coordination among governing bodies.

This inefficiency is particularly damaging given the demands placed upon the water supply, primarily by agriculture, which consumes an estimated 94 percent of the nation’s water resources. The heart of the problem lies in the legacy of Soviet-era planning: industrial production dedicated to cotton, a thirsty crop ill-suited to Turkmenistan’s naturally arid climate. This reliance on water-intensive agriculture depletes precious reserves. A shift toward drought-resistant crops, modern techniques such as drip irrigation, and greater agricultural diversification is long overdue to alleviate the immense pressure on the water supply.

Compounding these internal challenges are external pressures. Turkmenistan relies on the Amu Darya river, which flows along its border with Afghanistan and Uzbekistan, for roughly 90 percent of its water. The construction of Afghanistan’s Qosh Tepa Canal upstream represents a significant new threat. By diverting substantial amounts of water from the Amu Darya for its own agricultural ambitions, the canal project could reduce the flow reaching Turkmenistan, further straining an already stressed system. The absence of robust transboundary water-sharing agreements and effective diplomatic channels risks tensions, highlighting the urgent need for dialogue, potentially facilitated by neutral international mediators, to navigate this issue peacefully.

Overlaying all these factors is the undeniable impact of climate change. Projections indicate that temperatures in Turkmenistan are set to rise faster than the global average, inevitably leading to more frequent and severe droughts, further diminishing already scarce water resources and pushing the nation closer to the brink.

The human and environmental toll

The consequences of this escalating water scarcity are already being felt across Turkmenistan. Food insecurity is on the rise, with reports indicating that 12 percent of the population faces severe challenges in accessing sufficient food—among the highest rate among former Soviet nations. Access to safe drinking water is also becoming increasingly precarious. Residents across the country, including in the capital city of Ashgabat, report frequent water cuts and shortages. The tap water that is available is often of questionable quality, forcing many to rely on more expensive bottled water.

Reduced water flow and dying vegetation leave the soil vulnerable to erosion, intensifying the dust, sand, and salt storms that plague the region. In the northern Dashoguz province, vast tracts of agricultural land are severely affected by salt storms originating from the desiccated Aral Sea, posing significant risks to respiratory health and further degrading farmland. This vicious cycle of soil salinity, exacerbated by inefficient irrigation and poor drainage, diminishes air quality and agricultural productivity. Altogether, this creates an increasingly hostile environment for both people and wildlife.

The economic repercussions are also significant. Turkmenistan’s economy relies on natural gas exports, which constitute nearly 90 percent of its export revenue. However, the natural gas industry itself is water-intensive, requiring substantial amounts for cooling systems, equipment cleaning, and extraction processes. Water scarcity could directly impede the nation’s ability to maintain current natural gas production levels, potentially impacting national revenue and the funding of essential public services.

Furthermore, the unique ecosystems adapted to Turkmenistan’s arid conditions, including the vast Karakum Desert, are under threat. Rivers, wetlands, and oases—vital habitats for diverse flora, fauna, and migratory birds—risk shrinking or disappearing entirely, leading to biodiversity loss and pushing vulnerable species toward extinction.

Finally, the crisis is beginning to drive climate migration. Faced with failing crops, soil degradation, rising food prices, and dwindling agricultural employment (a sector that employs over 40 percent of the workforce), people are increasingly forced to migrate in search of better living conditions, both within the country and abroad. This displacement adds another layer of social and economic strain.

A call to action to maintain regional stability

The water crisis unfolding in Turkmenistan is not merely a domestic issue; its ripples will likely be felt regionally and globally. Declining agricultural output could increase Turkmenistan’s reliance on international food markets, potentially contributing to fluctuations in global food prices. More critically, the potent combination of environmental degradation, economic hardship, and potential social unrest fueled by water scarcity could destabilize the country and, by extension, the wider Central Asian region. History, including the the Syrian uprising, serves as a warning of how severe drought and resource mismanagement can exacerbate existing tensions and lead to conflict. Such instability could create power vacuums, ripe for large global powers.

Therefore, addressing Turkmenistan’s water challenge is a matter of international concern. Proactive engagement from the United States and the European Union could play a crucial role in promoting sustainable solutions and regional cooperation. In addition, supporting comprehensive research and data collection on water resources, climate impacts, and agricultural practices is essential for informed policymaking. The United States and the European Union should take the lead in facilitating regional dialogues involving Turkmenistan, Afghanistan, Tajikistan, and Uzbekistan. Such initiatives will be critical for fostering transboundary cooperation and preventing conflicts over shared water resources such as the Amu Darya. Furthermore, technical assistance and funding from the United States and the European Union, potentially channeled through civil society organizations, could help implement sustainable water management practices on the ground—from promoting efficient irrigation techniques to supporting public education campaigns on water conservation.

Turkmenistan’s struggle with water scarcity is a powerful illustration of the interconnected challenges facing many parts of the world in the twenty-first century, where climate change, resource management, and geopolitical interests collide. Ignoring this looming crisis is not an option. Concerted action, grounded in cooperation and sustainable practices, is essential not only to secure a livable future for Turkmens but also to maintain stability in the region.

Rasul Satymov is a researcher with Progres Foundation with a focus on climate change, energy, and water issues in Turkmenistan.

The post Turkmenistan’s deepening water crisis could have far-reaching regional consequences appeared first on Atlantic Council.

Sign up for PowerPlay, the Atlantic Council’s bimonthly newsletter keeping you up to date on all facets of the energy transition.

1. Investment in US energy and manufacturing

Last month, the United Arab Emirates (UAE) committed to investing $1.4 trillion in the United States over the next decade. Some of the investments in the package have already been announced, including a recent commitment by Emirates Global Aluminum to fund the construction of a smelter in the United States. If built, it would be the country’s first new aluminum smelter in thirty-five years and could potentially double US production. Trump will likely push the UAE to announce additional plans to invest in US manufacturing, infrastructure, and energy production, with petrochemicals, steel, and battery production likely targets.

Trump is expected to press Saudi Arabia to announce where it intends to invest the $600 billion that Crown Prince Mohammed bin Salman committed to during a post-inauguration call in January. Just like during his first term, Trump said that if Saudi Arabia agreed to large purchases of US products, he would make the country his first foreign visit. Now, he will look to hammer out the specifics, which will likely include purchases of military equipment in addition to investments in infrastructure, technology, and mining.

2. Nuclear energy cooperation

Saudi Arabia has tried to start a domestic nuclear power program since 2006. It has signed multiple agreements with various contractors and consultants—but with very little progress other than a small research reactor in Riyadh due to come online soon. Saudi Arabia has engaged with Chinese companies to explore domestic uranium mining and enrichment—a potentially problematic move from the perspective of the International Atomic Energy Agency (IAEA) because it can easily lead to weapons production.

However, there are signs that Saudi Arabia is now interested in complying with IAEA standards. Last August, Riyadh agreed to IAEA spot inspections designed to ensure that weapons are not being developed, potentially paving a pathway for cooperation with the United States. Last week, the Trump administration announced that it was dropping the Biden administration’s demand that Saudi Arabia normalize relations with Israel as a condition for civil nuclear cooperation negations, putting Saudi nuclear power back on the table. At stake may be commitments from Saudi Arabia to use US companies and American-made materials to build future reactors, as well as deals to supply Saudi-produced critical minerals to US customers.

3. Pumping more oil

Trump has been extremely vocal about his desire to lower oil prices. While US producers don’t want to see prices fall below the sixty dollars per barrel range (breakeven prices in the most productive shale basins are currently in the low to mid sixty dollars per barrel range), consumers would welcome lower gasoline prices this summer. Middle East producers seem eager to help, as OPEC+ recently committed to increase production by 411,000 barrels per day in June and is expected to recommit to gradually put more oil on the market at its ministerial meeting at the end of May. It is unlikely that Trump will press the Gulf countries to make additional commitments, but he will expect them to follow through—and will likely say so to the press.

4. LNG purchases

Trump is likely to push Gulf countries to expand their orders for US liquefied natural gas (LNG). Kuwait and Iraq already import US LNG and Bahrain just received its first cargo last month. Both Kuwait and Bahrain want to buy more LNG to meet high domestic electricity demand over the summer while natural gas outputs decline. Trump should push them to sign long-term offtake agreements with US LNG companies rather than rely on spot market purchases. This will ensure that these countries continue buying US gas even when more LNG become available from nearby Qatar, which is expanding its production.

This should be an easy sell to Kuwait, which is already in talks with the Australian company Woodside to buy a 40 percent stake in its Louisiana LNG terminal. Kuwait is aiming to secure LNG supplies from this project, but even with assistance from the Trump administration, it won’t be fully operational until the early 2030s. Trump should push Kuwait to sign additional offtake agreements, with the idea that if Kuwait does find itself oversupplied with LNG in the future, it can always resell cargos on the spot market.

Strategically, announcing at least two new LNG agreements with Middle Eastern countries will help the Trump administration’s position as it presses Europe to move forward with long-term offtake agreements for US LNG. Europe has been dragging its feet over concerns about emissions reporting, even though Europe needs US gas to replace the Russian LNG it currently buys. Trump can use LNG deals with Middle Eastern consumers to pressure Europe to commit to US purchases before winding down imports of Russian LNG. This would also help Trump pressure Russia to negotiate on Ukraine, as it would further squeeze Moscow’s income.

It isn’t just business

The focus of Trump’s visit to the Middle East may be on strengthening economic ties, but it is tough to ignore the backdrop of rising geopolitical tensions, particularly regarding Israel, Iran, and the Houthis. Business, trade, and energy markets are important to both the president and the leaders of the Gulf countries he will be meeting, but so are security and diplomacy. In Trump’s mind, business and geopolitics operate in tandem and everything is up for negotiation.  It should not come as a surprise to see energy deals, trade negotiations, sanctions enforcement and even weapons sales materialize in concert.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

Read more

Fellow

Ellen Wald

Nonresident Senior Fellow

Global Energy Center

Energy & Environment Oil and Gas

New Atlanticist Apr 17, 2025

How the National Energy Dominance Council can set the US on the path to energy security

By Ellen Wald

The National Energy Dominance Council must act quickly to restore stability to the energy industry amid geopolitical uncertainty.

Energy & Environment Energy Markets & Governance

EnergySource Mar 7, 2025

The US can reduce Russia’s nuclear energy—and geopolitical—influence

By Marina Lorenzini

As the Trump administration outlines its energy priorities, strengthening the US nuclear industry remains a point of bipartisan agreement. Revitalizing this sector will lead not only to domestic economic growth, but also a reduction in Russia’s dominance in global nuclear markets and its geopolitical leverage.

Energy & Environment Energy Markets & Governance

EnergySource Feb 24, 2025

US energy dominance is Putin’s worst nightmare as Russia enters its fourth year of war crimes

By Olga Khakova, Haley Nelson

Three years of Russia’s senseless aggression in Ukraine have caused monumental, unnecessary human suffering but also an irreversible impact on Russia’s energy sector. Sanctioning Russian LNG at the source is the most effective way to prevent future supply blackmail from Moscow.

Central Europe Eastern Europe

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Four energy deals Trump will look to make on his Middle East trip  appeared first on Atlantic Council.

The welcome in Riyadh will be more than ceremonial: Saudi Arabia is the linchpin of Trump’s Gulf tour. On May 14, Trump will join heads of all six GCC states at a summit in the Saudi capital. From Riyadh, Trump will head to Doha for talks with Qatari Emir Tamim bin Hamad Al Thani, then to Abu Dhabi to meet UAE President​ Mohammed bin Zayed Al Nahyan.

But Trump’s Gulf visit is more than a diplomatic tour; it is a pivotal opportunity to reimagine US–Gulf relations for a new era. The region is no longer content to be seen as the world’s energy hub alone; its ambitions now span digital innovation, green growth, and global influence. To remain a trusted and valuable partner, the United States must evolve its engagement strategy—offering not only promises but a visionary blueprint for shared prosperity and long-term stability.

Energy diplomacy: Oil on the table

Oil production will feature prominently in Trump’s talks, as energy prices tie directly into both global economics and domestic politics. Trump has drawn a link between high inflation in the United States and expensive oil, vowing to ask Saudi Arabia and the Organization of Petroleum Exporting Countries (OPEC) to “bring down the cost of oil.”​ Oil producers seemed to be trying to pre-empt such a request with this week’s announcement of another production increase, which caused oil prices to drop. Will this be enough for Trump? He will need to balance the US desire for affordable fuel with respect for Saudi economic goals, including ambitious domestic projects funded by higher oil prices. Any public statements on oil will be closely watched for signs of compromise. Energy talks may even address renewables and climate adaptation, a newly important topic for Gulf states.

Confronting regional conflicts

The Middle East’s simmering conflicts form a tense backdrop to the visit. Containing Iran’s nuclear ambitions will be a top priority. Trump’s visit comes as Washington tries to develop a new nuclear deal with Tehran, a move quietly backed by Saudi Arabia and the UAE​. Gulf leaders will seek reassurance that this outreach won’t compromise their security. Another pressing issue is Gaza. Trump pointedly is not visiting Israel—a sign that without progress toward a Gaza cease-fire or hostage deal, such a stop would yield little. Instead, Qatar and Egypt continue to work on brokering a cease-fire and easing the humanitarian crisis.

Yemen’s war, where a fragile cease-fire now offers hope, will also come up—Trump can reinforce Gulf-led peace efforts by lending US support​. From Yemen’s tentative peace to Syria’s uncertain future, Gulf partners are bearing more responsibility for regional crises, and US backing can help them succeed​. Each of these challenges underscores the importance of US-Gulf cooperation in resolving conflicts, as Washington and its Gulf allies strive to coordinate strategies and realign on the responsibilities of peace-making.

Investment and economic opportunities

Economic statecraft is at the heart of Trump’s Gulf agenda. The region’s deep pockets and sovereign wealth are a magnet for a US president eager to spur investment and job growth back home​. Trump will seek major new investments from Saudi Arabia, Qatar, and the UAE into US infrastructure, energy, and technology ventures​. In this transactional diplomacy, big numbers matter—and reports suggest that Trump is hoping to secure additional investment deals. Visible Gulf capital flows would allow Trump to claim wins for the US economy.

Beyond oil and real estate, today’s focus includes emerging industries. Cooperation in artificial intelligence and advanced technology is on the agenda​, aligning with Gulf states’ ambitions to become tech hubs. Expect announcements of joint tech funds or research centers. Defense deals are another pillar of the economic relationship. On the eve of the trip, the United States approved a $3.5 billion sale of advanced air-to-air missiles to Saudi Arabia, a signal that security cooperation (and the hefty contracts that come with it) will feature alongside business deals. By the end of the tour, Trump will aim to unveil a slate of agreements projecting a narrative that US-Gulf ties are translating into tangible economic benefits.

Despite headline-grabbing Gulf pledges, the numbers tell a cautionary tale. The UAE’s vaunted ten-year, $1.4 trillion investment commitment is enormous. However, this commitment lacks any clear roadmap, and such long-term promises face serious headwinds amid global economic volatility. Similarly, Saudi Arabia’s promised $600 billion (over four years) investment push represents an implausibly high share of the country’s economy. Riyadh’s finances are already stretched by Vision 2030 mega-projects like the city of NEOM, forcing the government to recalibrate and prioritize domestic spending. With the kingdom contending with turbulent growth forecasts and persistent political strains (not least the fallout from the war in Gaza), a sustained influx of Saudi capital into the United States is increasingly in doubt.

Recalibrating bilateral relationships

Each stop on the trip reflects a recalibration of US ties with a pivotal Gulf partner. In Saudi Arabia, Trump will renew official ties with Crown Prince Mohammed bin Salman after having kept his relationship with Riyadh strong during his time out of office. A similarly reassuring tone is expected in Abu Dhabi, where the UAE’s leaders seek confirmation of enduring US support even as they hedge with other partners. The stop in Doha highlights Qatar’s importance as a US ally, host to a major airbase and a mediator in regional crises. Broader strategic issues will weave through these bilateral talks. With China and Russia also courting the region, Trump’s visit is a chance to reassert US influence amid shifting alliances​.

As Trump prepares for his high-stakes visit to the Gulf, it is essential that his administration makes the most of this opportunity. Beyond familiar conversations about oil and security, this visit can—and should—mark the beginning of a broader, smarter partnership. Here are four ways Trump and his team can seize the moment.

1. Stabilize energy markets, embrace climate adaptation: Trump will ask Gulf producers to help moderate oil output to keep global prices in check. Yet to make this more than a one-note exchange, Trump should propose joint US–Gulf initiatives focused on clean energy transitions and climate resilience. By supporting Gulf investments in hydrogen, carbon capture, and renewable energy, the United States can demonstrate that its energy ties are evolving with the times—making both economies more resilient and forward-looking.
2. Prioritize conflict mediation: Washington’s long-standing alliances in the Gulf are grounded in shared security interests. Trump should leverage the considerable trust he enjoys with Gulf leaders to press for meaningful progress in Yemen’s fragile peace process and the war in Gaza. A joint US–Gulf conflict resolution framework could institutionalize cooperation, ensuring both swift responses to flare-ups and sustained support for reconstruction and peacebuilding, helping to stabilize a region too often trapped in cycles of crisis.
3. Bolster economic ties through innovation: Trump’s transactional approach to diplomacy is well known, but this trip offers a chance to push economic ties into new, forward-looking areas. Encouraging Gulf sovereign wealth funds to channel investments into US infrastructure and tech startups would deliver immediate economic benefits. Yet deeper gains lie in establishing joint research ventures in artificial intelligence, cybersecurity, and next-generation industries. This form of digital diplomacy could position both sides as global innovation leaders, fostering a tech-driven alliance for the twenty-first century.
4. Strengthen cultural bridges: To humanize what is often seen as a transactional relationship, the United States should double down on cultural diplomacy. Arts collaborations, sports exchanges, and interfaith dialogues can soften perceptions and deepen trust between societies. By championing such initiatives, Trump can underscore that US–Gulf ties are not confined to boardrooms and defense pacts but extend into the everyday fabric of life. Nurturing people-to-people connections is as strategic as any formal agreement.

If Trump can look beyond the predictable and embrace a more diversified, future-oriented approach—one that ties oil and security to innovation, youth, and culture—he can transform this trip from a standard diplomatic handshake into a legacy-defining pivot. The sands of the Gulf are shifting fast. To stay grounded, the United States must not just renew its ties—but reinvent them for the decades ahead.

Racha Helwa is the director of the empowerME Initiative at the Atlantic Council’s Rafik Hariri Center for the Middle East.

The post Trump’s Gulf gamble: Oil, conflicts, and opportunities in a high-stakes visit appeared first on Atlantic Council.

After Russia’s illegal full-scale invasion of Ukraine in February 2022, Western partners imposed unprecedented financial sanctions and export controls against Russia. These measures aim to achieve three objectives:

1. Significantly reduce Russia’s revenues from commodities exports;
2. Cripple Russia’s military capability and ability to pursue its war;
3. Impose significant pain on the Russian economy.

The Atlantic Council’s Russia Sanctions Database tracks the restrictive economic measures Western allies have placed on Russia and evaluates whether these measures are successful in achieving the stated objectives.

The Database also centralizes the financial designations of more than five thousand Russian entities and individuals sanctioned by the Group of Seven (G7) jurisdictions, Australia, and Switzerland. The Database is updated quarterly and can be queried to determine if an individual or entity is designated. Please refer to the appropriate designating jurisdiction’s websites and platforms for additional information and confirmation. The data provided in the Database is intended for informational purposes only.

How to use this database to reveal sanctions gaps: Click on the check mark () and cross mark () filters at the top of each column. Doing so will build a list of entities/individuals that are sanctioned by one country but not by another.

The seven jurisdictions covered in this database are the United States, the United Kingdom, the European Union, Switzerland, Canada, Australia, and Japan. Data in the database was last updated on November 8, 2024

Objective 1: Significantly reduce Russia’s revenues from commodities exports

Lengthening of global oil trade routes

Restrictive economic measures against Russia’s energy sector have caused major restructuring of the global oil market and lengthening of oil trade routes, but Russia is still generating revenue from oil exports to India and China. 

When the European Union (EU) banned seaborne Russian oil imports, the United States stepped in and became the largest supplier of crude oil to Europe. US crude oil exports to Europe increased by 23 percent in June 2024 year on year. However, as the United States became the top oil exporter to Europe, it lost half of its share of the Indian market. India opted for cheaper Russian oil as a result of the oil price cap and cut US crude oil imports by 47 percent in 2023. 

This reshuffling in the global energy market resulted in the lengthening of oil trade routes: The United States and the Middle East are shipping oil to Europe, while Russia is shipping oil to India and China, which in some cases re-export refined Russian oil to Europe. 

Longer oil trade routes created new loopholes in the Group of Seven (G7) sanctions regime. For example, since the G7 does not have import restrictions on refined Russian oil from third countries, Europe has been buying Russian oil products such as fuel from India, lengthening the supply chain even more. Between December 2022 and December 2023, the price cap coalition members imported about nine billion dollars worth of Russian-origin oil products from India and other third countries.

Additionally, longer, multiparty trade routes are also ultimately related to enforcement issues. In response to the oil price cap, Russia has built up a shadow fleet of tankers that can easily take advantage of these routes. At the same time, Russia has developed a multiparty blending market against which sanctions are proving more complicated to enforce. 

Russia seems to be repeating Iran’s sanctions evasion playbook, which has been to re-export blended and refined crude oil through third countries. It might be time for the G7 to take a more comprehensive step and replace the oil price cap with sanctions on Russian oil. The price cap leaves much room for maneuvering both for Russia and third countries to profit from re-exporting. Sanctioning Russian oil would significantly increase global oil prices and negatively impact the global economy. However, if India were to stop importing Russian oil, Russia would lose a significant market for its crude oil, perhaps even becoming fully dependent on China just like Iran, who has to sell oil at a much lower price than Russia.

The Treasury Department’s November 21 action designating Gazprombank demonstrates the Biden administration’s resolve to restrict Russia’s ability to generate revenue from commodity exports. Gazprombank was previously designated by the United Kingdom, Australia, New Zealand, and Canada.

Proposed G7 restrictions could irreversibly damage the global diamond industry  

The G7 has introduced phased prohibitions on the imports of Russian-origin non-industrial diamonds. They are likely to cause shock waves in the global diamond industry, but it is unclear whether they would weaken Moscow’s ability to finance the war on Ukraine. Russia’s diamond industry generates about $3.8 billion in revenue annually, a minuscule amount compared to the about $100 billion Russia received in oil and gas revenues last year. While not being a critical commodity exporter for Russia, the Russian state-owned diamond mining company Alrosa has the largest share of the global diamond market (31 percent) and produces 35 percent of the world’s rough diamonds. This asymmetry implies that diamond restrictions will not impact Russia’s war chest, but will negatively impact the $100 billion global diamond industry. 

Russia still continues to profit from diamond sales despite sanctions. For example, in 2023, Hong Kong imported $657.3 million worth of diamonds from Russia, a dramatic 1,700 percent increase from the previous year. However, countries at the low end of the supply chain, such as India, that refine and polish diamonds and other precious gems, will no longer be able to re-export polished Russian diamonds to the G7. This will especially impact India which will have to either export polished Russian diamonds to other markets or import rough diamonds from other countries. In either case, India’s diamond industry will suffer from major supply chain restructuring. 

The G7 countries are in the process of creating new requirements for tracing the origins of all diamonds before they enter G7 and EU countries. The “mandatory traceability program” will go into effect on March 1, 2025 and will likely increase compliance costs across the diamond industry. In particular, the EU will require all non-Russian diamonds to go through Antwerp, Belgium to verify their origins. Industry leaders have expressed concerns about bottlenecks and the advantage Antwerp would be getting over other sellers in case this mechanism is approved. 

The World Federation of Diamond Bourses has acknowledged the need to trace diamonds’ origins but raised concerns about the plan the G7 has suggested. The cost of compliance with sanctions, including the cost of shipping diamonds to Belgium while paying for freight insurance will likely increase the price of non-Russian diamonds, ultimately making Russian diamonds comparatively less expensive and therefore more attractive to consumers. 

The G7 governments should take into consideration concerns from the world’s diamond industry and African stakeholders, and create the space for diamond experts to present an alternative plan for traceability that meets the G7’s intent.

Objective 2: Cripple Russia’s military capability and ability to pursue its war

Can India manage to enjoy the benefits of trading with Russia without facing the consequences?

After the United States pressured the United Arab Emirates and Turkey to comply with critical technology export controls on Russia, India has emerged as a primary transshipment hub and the second largest supplier of restricted technology to Russia. As it turns out, Russian authorities began finding solutions to transact with Indian companies through clandestine channels shortly after Russia invaded Ukraine. 

When the G7 imposed sanctions on Russia, India increased imports of cheap Russian oil. India was paying Russia in rupees for a portion of these imports, resulting in Moscow accumulating a considerable amount of rupees it could not spend anywhere else, similar to the phenomenon with China that we discussed in our analysis of the “axis of evasion.” 

According to the Financial Times, by October 2022, Russia’s Industry and Trade Ministry made a secret plan that would kill two birds with one stone: Russia would buy sensitive electronic components from India with the 82 billion rupees (about one billion dollars) the Russian banks had accumulated from oil exports. The payments would take place in a “closed payment system between Russian and Indian companies, including by using digital financial assets”, and outside of Western oversight. It is difficult to determine if the plan worked because the Financial Times obtained the information about this plan from leaked Russian documents. However, given that India is now the second largest sensitive technology provider to Russia and Russian banks maintain branches in several Indian cities, it is safe to assume that it did. 

If everything follows the current trajectory, India will increase technology exports to Russia to address the massive trade imbalance with Moscow. Specifically, in the fiscal year ending in March 2024, New Delhi imported $65.7 billion worth of crude oil from Russia and exported only $4.26 billion worth of goods. To restore the trade balance, India exported items such as microchips, circuits, and machine tools worth more than $60 million both in April and May, and $95 million in July. Thus, it is now in India’s interest to export more electronics to Russia so it can correct the trade imbalance before the end of the fiscal year. 

The United States is aware of India’s increasing role in supplying Russia’s military-industrial complex with critical technology. The Treasury Department included nineteen Indian entities in its latest tranche of designations of Russia’s military procurement networks. At the same time, the State Department sanctioned more than 120 additional entities and individuals supporting Russia’s military-industrial complex, and the Commerce Department imposed export controls on forty foreign entities to prevent them from obtaining US technologies. One of the designated companies is Shreya Life Sciences, an Indian drugmaker that, according to the Treasury Department’s sanctions designation, has exported restricted high-end servers optimized for artificial intelligence to Russia. Indian authorities’ cooperation with the United States and G7 allies will be significant in ensuring Indian companies such as Shreya Life Sciences stop undermining the sanctions and export controls regime against Russia. 

As a starting point, the United States and its G7 allies should increase engagement with Indian authorities and encourage India’s Financial Intelligence Unit to share information through Egmont Group channels that may shed light on the closed payment channel that Indian companies supposedly used to transact with Russian companies, and whether this channel is still operational. Western allies should strongly encourage India to consider the exposure risk Indian financial institutions have with Russian banks that have been sanctioned or removed from the SWIFT messaging system and have branches in India, such as Sberbank, VTB Bank, and Promsvyazbank, as Indian financial institutions transacting with these Russian banks are subject to US secondary sanctions. 

Indian banks should consider their exposure to and risk of connecting with Sistema Peredachi Finansovykh Soobscheniy or “System for Transfer of Financial Messages” (SPFS). The Treasury recently warned foreign financial institutions that SPFS is considered part of Russia’s financial services sector. As a result, banks that join Russia’s financial messaging system may be targeted with sanctions.

Finally, the G7 partners should take into account India’s high dependence on imported energy. India imports 88 percent of its oil and is working toward increasing the role of renewables in the energy mix. Engaging with Indian authorities on finding alternative energy resources and suppliers would be a recommended next step for the G7 allies. This would also help India address the payment challenges it has experiencing with Russian authorities, who have been demanding that Indian companies pay Russian companies in renminbi instead of rupees.

Objective 3: Impose significant pain on the Russian economy

G7 countries issued unprecedented coordinated sanctions on Russia following Russia’s invasion of Ukraine in 2022. Western sanctions have significantly impacted Russia’s ability to fight its war and have made it more difficult for Russia to operate. There are indications that Russia’s economy is struggling. For example, the Central Bank of Russia recently increased the interest rate to 21 percent. Russia’s National Welfare Fund is declining as well as its export revenues as a result of sanctions. However, after nearly three years of war and sanctions, Western partners have not fully achieved their objectives. 

As the war continues on, the effects of restrictive economic measures are waning as Russia has created workarounds and mechanisms to transact and trade with its partners outside the reach of Western sanctions. Russia has adapted and evolved into a wartime economy. Measures such as export controls are making it more difficult for Russia to import battlefield technology and materials. However, Russia is finding solutions such as partnering with Iran and North Korea to obtain missiles, unmanned aerial vehicles, and other military equipment. 

Further, Russia is not the only country affected by Western sanctions. Russia’s neighboring countries are struggling to comply with sanctions as they have historically relied on economic ties and trade with Russia and have few opportunities to develop alternatives. Meanwhile, entire industries, including oil and precious gems, have had to develop and implement new ways of doing business and adjust to sanctions compliance. Technology companies also continue to have trouble complying with export controls. Their sensitive Western technology and dual-use goods continue to end up on the battlefield in Ukraine.

Going forward, Western partners must continue economic pressure on Russia in concert with military assistance to Ukraine. Sanctioning Russian oil will be critical in imposing pain on the Russian economy since oil and gas revenues filled one-third of Russia’s budget in 2023. However, if the United States and its G7 allies continue to leverage economic measures to change the course of wars and behaviors of states, they will need to have clearly outlined objectives and measures of assessment before pulling the trigger on sanctions. Developing a comprehensive understanding of the industries such measures will target will be critical for managing expectations of what sanctions can achieve, and what ramifications they will have for the global economy. 

Above all, the United States and G7 allies need to recognize that the use of economic tools comes at a cost, such as oil price increases and supply chain reshuffling. Economic tools avoid the damage of human deaths, but they require economic and financial sacrifice. It is now up to the G7 allies to decide what is a bigger priority: Oil prices or international security. 

Authors: Kimberly Donovan and Maia Nikoladze

Contributions from: Mikael Pir-Budagyan

Related content

New Atlanticist Mar 28, 2024

The axis of evasion: Behind China’s oil trade with Iran and Russia

By Kimberly Donovan, Maia Nikoladze

Beijing has developed a way to import Iranian and Russian oil while bypassing the Western financial system and shipping services.

China Economy & Business

Testimony Feb 21, 2025

Kimberly Donovan testifies to the US-China Economic and Security Review Commission on the Axis of Autocracy

By Kimberly Donovan

On February 20, Economic Statecraft Initiative Director Kimberly Donovan testified to the US-China Economic and Security Review Commission at a hearing titled, “An Axis of Autocracy? China’s Relations with Russia, Iran, and North Korea.”

China Economy & Business

New Atlanticist Mar 26, 2025

There’s a right way to lift sanctions on Russia. Follow these Dos and Don’ts.

By Daniel Fried, Kimberly Donovan

A former US diplomat and a former US Treasury official offer eleven guiding principles for moving forward in negotiations on sanctions relief with Russia.

Conflict Economy & Business

Join our list

Sign up for other events and analysis from the GeoEconomics Center.

Economic Statecraft Initiative

Housed within the GeoEconomics Center, the Economic Statecraft Initiative (ESI) publishes leading-edge research and analysis on sanctions and the use of economic power to achieve foreign policy objectives and protect national security interests.

Learn More

The post Russia Sanctions Database: November 2024 appeared first on Atlantic Council.

Since the Trump White House and the Kremlin began negotiations in February 2025 to end the Russian invasion of Ukraine, potential cooperation between the United States and Russia in the Arctic has been high on the agenda. However, the US will face stiff competition from China in this arena, with Arctic initiatives occupying an important place at the heart of the strengthening strategic relationship between Beijing and Moscow.

As the world watches the Russian invasion of Ukraine unfold, UkraineAlert delivers the best Atlantic Council expert insight and analysis on Ukraine twice a week directly to your inbox.

Maritime strategy has long played a significant role in Russian President Vladimir Putin’s thinking as he works to expand Moscow’s influence on the international stage. In August 2024, Putin ordered the establishment of a Russian maritime collegium headed by his close personal ally and advisor Nikolai Patrushev, who formerly led Russia’s FSB security service and the country’s National Security Council.

The recent creation of a maritime collegium comes at a time when Russia is accused of engaging in a wide range of hostile naval acts including the sabotage of undersea cables in the Baltic Sea along with surveillance activities off the coast of Britain and other NATO member states. Unsurprisingly, one of the stated goals of the new collegium is to help secure Russia’s national interests in the Arctic.

Russia’s Arctic ambitions are similarly evident in the country’s current maritime doctrine. Russian control over the Northern Sea Route, which runs through Arctic waters along Russia’s northern coast and serves as the shortest shipping route between Europe and the Pacific, is vital for the Kremlin’s plans. With this in mind, Putin is currently prioritizing an enlarged and modernized military presence in the Arctic region including enhanced naval capabilities.

Moscow sees the Northern Sea Route as part of Russia’s national transport infrastructure and has sought to control access for shipping from other nations. This is particularly controversial as the Northern Sea Route covers a vast area that is expected to become increasingly navigable in the coming years due to changing environmental conditions. Some of the areas currently claimed by the Kremlin are situated well beyond the territorial waters of the Russian Federation.

Critics have argued that Russia’s efforts to restrict access to the Northern Sea Route directly violate the 1982 United Nations Convention on the Law of the Sea (UNCLOS). However, while Russia is a signatory of the convention and ratified its commitments to UNCLOS in 1997, Kremlin officials say the terms are not applicable to Russia’s maritime claims in the Arctic region.

Eurasia Center events

Online Event Fri, January 30, 2026 • 9:00 am ET

How Russia’s winter warfare strategy targets Ukrainian civilians

Conflict Europe & Eurasia Geopolitics & Energy Security Human Rights

With Russia militarizing along the Northern Sea Route and laying claim to large parts of the Arctic maritime zone, the scope for potential future conflict is huge. Geopolitical tensions are likely to be further heightened by the deepening regional involvement of China in partnership with Russia. The two nations have identified the Arctic as a key area of cooperation, both as a trade route linking China to Europe and as a source of the natural resources that Beijing needs to fuel its economy.

In the years ahead, the ports of the Northern Sea Route could become increasingly important for the projection of Chinese and Russian naval power on the international stage, both in the Arctic region and beyond. This could allow both countries to enforce their claims to Arctic resources and overwhelm other regional nations with less powerful navies such as Canada, Denmark, and Norway. This is leading to security concerns over a number of isolated and vulnerable islands throughout the region.

Allowing Russia to gain the ascendancy in the Arctic would lead to unpredictable geopolitical consequences. Control over the oil and gas resources of the Arctic region could dramatically increase Russian state revenues. Past experience indicates that this windfall would likely be used by the Kremlin to finance military spending, potentially setting the stage for fresh acts of aggression. Limiting Russian access to the Arctic should therefore be viewed as matter of international security.

As the struggle for dominance in the Arctic heats up, it is already clear that NATO member states need to dramatically strengthen their presence and capabilities in the region. It would also make sense to call upon international bodies such as the International Court of Justice to request clarification regarding the regime that Russia has arbitrarily established in the waters of the Northern Sea Route.

Ultimately, the goal should be to conclude an international convention based on UNCLOS and the UN Charter that can prevent today’s mounting tensions from leading to armed conflict in the Arctic. Before that can happen, countries with territories that could potentially be at risk from an expansionist Russia should look to seek enhanced security agreements with the United States and other NATO members that comply with the requirements of international law.

Bohdan Ustymenko is director of Ukraine’sNational Security Institute.

Further reading

UkraineAlert Mar 25, 2025

Ukraine’s growing military strength is an underrated factor in peace talks

By Serhii Kuzan

Any discussion on the future course of the war against Russia and the terms of any peace deal must take into account the fact that Ukraine is a now major military power in its own right, writes Serhii Kuzan.

Conflict Defense Industry

UkraineAlert Mar 20, 2025

Putin is ruthlessly erasing Ukrainian identity in Russian-occupied Ukraine

By Peter Dickinson

Kremlin dictator Vladimir Putin is pursuing policies in Russian-occupied Ukraine that almost certainly meet the definition of ethnic cleansing and may qualify as genocide, writes Peter Dickinson.

Civil Society Conflict

UkraineAlert Mar 18, 2025

Britain takes the lead as Europe seeks to boost support for Ukraine

By Alina Hrytsenko

With the future of US support for Ukraine in doubt, Britain is leading European efforts to bolster the Ukrainian war effort and deny Putin an historic victory that would place the whole of Europe in peril, writes Alina Hrytsenko.

Conflict Defense Industry

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

Read more from UkraineAlert

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraine’s politics, economy, civil society, and culture.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Learn more

The post Putin’s Arctic ambitions: Russia eyes natural resources and shipping routes appeared first on Atlantic Council.

It’s an open question whether the United States, whose natural gas producers now rely on European liquefied natural gas (LNG) sales to boost profits and support investments, would ultimately cede that market—and the political influence that comes with it—to Russian pipeline exports. Perhaps Washington will concede its newfound dominance in Europe’s energy system as a cost of attaining peace in Ukraine—and extricating itself from the continent to focus on the Indo-Pacific theater.  

But for Europe, allowing Russia back into its gas market through Nord Stream would be a costly mistake. It would furnish the Russian war machine with an additional $5 billion, open the temptation for German manufacturers to extract a 1.5 percent competitive advantage over other Europeans, and leave 100 million Europeans in geopolitical limbo. 

Sign up for PowerPlay, the Atlantic Council’s bimonthly newsletter keeping you up to date on all facets of the energy transition.

No reason for Nord Stream nostalgia 

There is an obvious temptation for Europe to try to return to the seemingly halcyon world before COVID-19 and war in Ukraine. Elevated gas prices have threatened the continent’s long-term industrial competitiveness. In 2023—after the price spikes of 2022 subsided—industrial gas prices remained a whopping four-and-a-half times higher than in the United States. The European average in 2019, by contrast, was a modest 70 percent higher than US prices. 

But Europeans should not view the pre-war status quo through rose-colored glasses. Europe was vulnerable to supply shutoffs, such as happened during Russo-Ukrainian disputes in 2006 and 2009. And supposedly cheap Russian gas proved to be very expensive in the end—mitigating the energy crisis cost Europe a historic price of nearly €700 billion just by mid 2023, on top of nearly €250 million in aid to Ukraine by 2025. All in all, the cost of dependence amounted to more than €1 trillion.   

Europe can neither forget the lessons learned from Russia’s weaponization of gas supply in the lead up to and during the war; nor can it ignore the new geopolitical realities that define its relationship with Russia.  

Paying off the arsonist

First, if Europe were to restore Russian pipeline imports, that would greatly increase cash flow to Gazprom. Currently, Russia is selling gas mostly to China, supplying the country with 30 billion cubic meters (bcm) of gas in 2024 and aiming to hit 38 bcm in 2025 with the opening of a new eastern pipeline. But those volumes pale in comparison to the record 179 bcm shipped by pipeline to Europe in 2019. Even the amount of gas exported via the now-destroyed Nord Stream 1 alone—which had the same nameplate capacity as its successor—totaled 58.5 bcm in 2019, far more than total Russian pipeline and LNG shipments to China in 2024.  

Chinese buyers can’t make up for the loss of European markets. There exists no infrastructure to bring the gas from Russia’s massive European fields to Asian consumers. China has slow walked completion of the 50 bcm Power of Siberia 2 pipeline and appears to be hesitant about becoming too reliant on Russian gas. Losing the European market has severely hurt Gazprom, which posted a net loss of $12.9 billion in 2024—after seeing record profits of $29 billion in 2021. 

This has profound implications for Russia’s ability to wage war in Ukraine—and elsewhere. If Gazprom were to attain an additional $15 billion from Nord Stream 2 sales—based on a pre-war estimate of the pipeline’s potential revenue generation—and another $15 billion from restarting the damaged Nord Stream 1 pipeline, one might assume that half would go to Russia’s state budget. Of that $15 billion, one third would go to the military, based on the proportion of Russia’s 2025 budget dedicated to defense. This would mean $5 billion more to Russia’s military, a 4 percent increase in the Russian war chest. 

Distorting European competition 

Moreover, making Germany the primary entry point for Russian gas into Europe would provide German industry with a temptation to take advantage over its neighbors, as was the case in the early 2000s, constantly threatening European unity at a trying time. A primary reason why other Western European countries had opposed Nord Stream 2 even before the war was fear that Germany monopolizing Russian gas flows would give it a competitive advantage over manufacturers in Italy and France. 

Indeed, a 2012 investigation by the European Commission into Gazprom found that Russian gas was cheaper for Germany than it was for the average European country by at least 15 percent. Data released by Russian news agency Interfax in 2010 revealed that Gazprom was charging France 10 percent and Italy 25 percent more than Germany for gas. Further, the Commission found in 2018 that Gazprom had violated European Union (EU)  antitrust rules to divide national markets, potentially allowing it to overcharge five Central European member states—countries which paid even more than France and Italy.  

For the most energy-intensive sectors in Europe, energy can account for over 10 percent of manufacturing costs—so if German industry gets a 15 percent discount, the country gains up to 1.5 percent advantage in profitability over the European average.  

A dagger at the heart of European unity 

Last but not least, Nord Stream 2 would deliver Russian gas in a route that bypasses most of the Central European transit states, allowing Russia to leverage energy supplies to these countries separately from Western Europe and leaving 100 million Europeans in geopolitical limbo.  

Whereas Moscow’s disputes with Kyiv in the 2000s over gas supply meant that cutting off Ukraine would cut off the rest of Europe, Nord Stream 2’s reopening would allow Russia to more effectively divide and conquer the continent. In a new era of full-scale war to readjudicate the political borders of Europe, this would leave substantial portions of the EUand NATO at the mercy of the Kremlin’s imperial whims. 

Three numbers that should frighten Europe 

Ultimately, regardless of how Washington decides to proceed on Nord Stream 2, Europe must take responsibility for its own decisions on whether to buy gas from the pipeline or not. In weighing that choice, it must remember three key numbers: $5 billion in additional money for the Russian military; 1.5 percent of additional profitability for German industry over its EU neighbors; and 100 million Europeans left vulnerable to renewed Russian aggression. 

Michał Kurtyka is a distinguished fellow with the Atlantic Council Global Energy Center and was formerly Poland’s minister of energy, climate, and environment. 

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

Read more

EnergySource Mar 7, 2025

The US can reduce Russia’s nuclear energy—and geopolitical—influence

By Marina Lorenzini

As the Trump administration outlines its energy priorities, strengthening the US nuclear industry remains a point of bipartisan agreement. Revitalizing this sector will lead not only to domestic economic growth, but also a reduction in Russia’s dominance in global nuclear markets and its geopolitical leverage.

Energy & Environment Energy Markets & Governance

EnergySource Feb 27, 2025

Can the EU’s Clean Industrial Deal cut carbon and restore competitiveness? 

By Andrea Clabough, Andrei Covatariu, Elena Benaim, Carol Schaeffer

Atlantic Council experts share their analysis on the EU’s new industrial policy, its implications for European energy security, and how key partners may respond to the bloc’s evolving regulatory landscape.

Eastern Europe Energy & Environment

EnergySource Feb 24, 2025

US energy dominance is Putin’s worst nightmare as Russia enters its fourth year of war crimes

By Olga Khakova, Haley Nelson

Three years of Russia’s senseless aggression in Ukraine have caused monumental, unnecessary human suffering but also an irreversible impact on Russia’s energy sector. Sanctioning Russian LNG at the source is the most effective way to prevent future supply blackmail from Moscow.

Central Europe Eastern Europe

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Nord Stream could divide Europe yet again  appeared first on Atlantic Council.

Canada is facing economic threats from China and Russia targeting its critical industries and infrastructure. The Business Council of Canada, which consists of CEOs of top Canadian companies, identified cyberattacks, theft of intellectual property, Chinese influence on Canada’s academic sector, and trade weaponization by China among the top economic threats to Canada.

More recently, a new and unexpected threat emerged from the United States, when Washington announced 25 percent tariffs on all Canadian goods except for the 10 percent tariffs on energy. To address threats from Russia and China and reduce trade overdependence on the United States, Canada’s federal government will need to consolidate economic power and devise an economic statecraft strategy that will leverage Canada’s economic tools to mitigate these economic threats and vulnerabilities. This paper covers the following topics and offers recommendations:

• Economic threats to Canada’s national security 
• An unexpected threat: Overdependence on trade with the United States
• Lack of economic power consolidation by Canada’s federal government
• Mapping Canada’s economic statecraft systems: Sanctions, export controls, tariffs, and investment screening

Economic threats to Canada’s national security

Cyberattacks on Canada’s critical infrastructure 

Canada’s critical infrastructure has become a target of state-sponsored cyberattacks. In 2023, Canada’s Communications Security Establishment (CSE)—a signals intelligence agency—said that Russia-backed hackers were seeking to disrupt Canada’s energy sector. Apart from accounting for 5 percent of Canada’s gross domestic product (GDP), the energy sector also keeps the rest of Canada’s critical infrastructure functioning. CSE warned that the threat to Canada’s pipelines and physical infrastructure would persist until the end of the war in Ukraine and that the objective was to weaken Canada’s support for Ukraine. 

Beyond critical infrastructure, Canadian companies lost about $4.3 billion due to ransomware attacks in 2021. More recently in February 2025, Russian hacking group Seashell Blizzard was reported to have targeted energy and defense sectors in Canada, the United States, and the United Kingdom. Russia and other adversarial states will likely continue targeting Canada’s critical infrastructure and extorting ransom payments from Canadian companies. 

Theft of intellectual property

Canadian companies have become targets of Chinese state-sponsored intellectual theft operations. In 2014, a Chinese state-sponsored threat actor stole more than 40,000 files from the National Research Council’s private-sector partners. The National Research Council is a primary government agency dedicated to research and development in science and technology. Apart from undermining Canadian companies, theft of Canada’s intellectual property, especially research on sensitive technologies, poses a threat to Canada’s national security. 

Chinese influence on Canada’s academic sector 

Adversarial states have taken advantage of Canada’s academic sector to advance their own strategic and military capabilities. For example, from 2018 to 2023, Canada’s top universities published more than 240 joint papers on quantum cryptography, space science, and other advanced research topics along with Chinese scientists working for China’s top military institutions. In January 2024, Canada’s federal government named more than one hundred institutions in China, Russia, and Iran that pose a threat to Canada’s national security. Apart from calling out specific institutions, the federal government also identified “sensitive research areas.” Universities or researchers who decide to work with the listed institutions on listed sensitive topics will not be eligible for federal grants. 

Trade weaponization by China

Trade weaponization by China has undermined the economic welfare of Canadians and posed a threat to the secure functioning of Canada’s critical infrastructure. For example, between 2019 and 2020, China targeted Canada’s canola sector with 100 percent tariffs, restricting these imports and costing Canadian farmers more than $2.35 billion in lost exports and price pressure. In Canada’s 2024 Fall Economic Statement, which outlined key measures to enhance Canadian economic security, the Ministry of Finance announced its plans to impose additional tariffs on Chinese imports to combat China’s unfair trade practices. These included tariffs on solar products and critical minerals in early 2025, and on permanent magnets, natural graphite, and semiconductors in 2026. 

However, the imposition of 25 percent tariffs by Washington on both Canada and China could result in deepening trade ties between the two. Canada exported a record $2 billion in crude oil to China in 2024, accounting for half of all oil exports through the newly expanded Trans Mountain pipeline. Increased trade with China would increase Canada’s exposure to China’s coercive practices, and would be a direct consequence of US tariffs on Canada. 

An unexpected threat: Overdependence on trade with the United States

A new and unexpected threat to Canada’s economic security emerged from the United States when the Trump administration threatened to impose 25 percent tariffs on all Canadian goods (except for the 10 percent tariffs on energy imports). The United States is Canada’s largest export market, receiving a staggering 76 percent of Canada’s exports in 2024. Canada relies on the United States particularly in the context of its crude oil trade, shipping 97.4 percent of its crude oil to the United States. 

Canada had already started working on expansion to global markets through pipeline development even before Washington announced tariffs. It has succeeded in the expansion of the Trans Mountain pipeline in May 2024, which has enabled the export of Canadian oil to Asia. Canada is reviving talks on the canceled Energy East and Northern Gateway pipelines—the former would move oil from Alberta to Eastern Canada, and the latter would transport oil from Alberta to British Columbia for export to Asian markets. 

In addition to oil trade, another area where Canada is highly dependent on the United States is in auto manufacturing. Behind oil exports, motor vehicles account for the largest share of Canadian exports to the United States, resulting in exports valued at $50.76 billion (C$72.7 billion Canadian dollars) in 2024. With 25 percent tariffs on all Canadian goods, the automotive industry is expected to take a hit, especially as components cross the border six to eight times before final assembly.

Figure 1

The United States invoked the International Emergency Economic Powers Act to impose tariffs on Canada with the stated objective to curb fentanyl flows to the United States. The measure has plunged US-Canada relations into chaos and could result in a trade war between the two long-standing allies. In response, Canada might reroute oil shipments to China through existing pipelines and increase trade with China in general. Further economic integration with China would increase Canada’s exposure to economic threats emanating from China, including trade weaponization and anti-competitive practices. 

Because of US tariffs, Canada could also face challenges in strengthening the resilience of its nuclear fuel and critical mineral supply chains. In the 2024 Fall Economic Statement, Canada outlined key measures for its economic security that heavily incorporated US cooperation. This included plans to strengthen nuclear fuel supply chain resiliency away from Russian influence, with up to $500 million set aside for enriched nuclear fuel purchase contracts from the United States. Canada also aims to strengthen supply chains for responsibly produced critical minerals, following a $3.8 billion investment in its Critical Minerals Strategy, which relies on the United States as a key partner. Given the tariffs, Canada will need to diversify its partners and supply sources quickly if it wishes to maintain these economic security goals. 

Figure 2: US-Canada overlapping memberships in security organizations and alliances

Lack of economic power consolidation by Canada’s federal government

Canada has a range of economic tools and sources of economic power to respond to emerging economic threats and mitigate vulnerabilities; however, it currently lacks economic power consolidation. Unlike the United States, where the federal government can regulate nearly all economic activity, Canada’s Constitution Act of 1867 grants provinces control over their “property and civil rights,” including natural resources. Section 92A, which was added to the constitution in 1982, further reinforced the provinces’ control over their natural resources. Meanwhile, the federal government has control over matters of international trade including trade controls. However, when international trade issues concern the natural resources of provinces, tensions and disagreements often arise between provinces and the federal government, and the lack of economic power consolidation by the federal government becomes obvious.

This issue manifested when the United States announced 25 percent tariffs on Canada in March 2025 as Canada’s federal government and the Alberta province had different reactions. Canada’s main leverage over the United States is oil exports. Refineries in the United States, particularly those in the Midwest, run exclusively on Canadian crude oil, having tailored their refineries to primarily process the heavy Canadian crude. Since 2010, Canadian oil accounted for virtually 100 percent of the oil imported by the Midwest. Threatening to hike levies on crude oil exports could have been Canada’s way of leveraging energy interdependence to respond to US tariffs. However, Alberta Premier Danielle Smith stated that Alberta, which is Canada’s largest oil producer and top exporter of crude oil to the United States, would not hike levies on oil and gas exports to the United States. Being unable to speak in one voice as a country even during a crisis is a direct consequence of Canada’s regional factionalism, characterized by each province looking out for their own interests. 

The United States-Mexico-Canada (USMCA) trade agreement, which entered into force during the first Trump administration in July 2020, may have also contributed to diminishing the economic power of Canada’s federal government. Article 32.10 of USMCA requires each member of the agreement to notify other countries if it plans to negotiate a free trade agreement (FTA) with a nonmarket economy. Thus, if Canada were to sign an FTA with China, the United States and Mexico could review the agreement and withdraw from USMCA with six months’ notice. After the USMCA was signed, Canadian scholars wrote that this clause would effectively turn Canada into a vassal state of the United States, with the authority to make decisions on internal affairs but having to rely on the larger power for foreign and security policy decisions. Five years later, it looks like the USMCA has put Canada in a difficult position, being targeted by US tariffs and not having advanced trading relations with other countries. 

Figure 3: US-Canada overlapping memberships in economic organizations and alliances

Mapping Canada’s economic statecraft systems

To secure Canada’s critical infrastructure and leverage its natural resources to shape favorable foreign policy outcomes, Canada’s federal government has a range of economic tools and the ability to design new ones when appropriate. Canada’s economic statecraft tool kit is similar to those of the United States and the European Union and includes sanctions, export controls, tariffs, and investment screening. Canada has imposed financial sanctions and export controls against Russia along with its Group of Seven (G7) allies. It has levied tariffs on Chinese electric vehicles, in line with US policy, and recently created investment screening authorities to address concerns about adversarial capital. 

Financial sanctions 

Similar to the United States, Canada maintains sanctions programs covering specific countries such as Russia and Iran, as well as thematic sanctions regimes such as terrorism. Global Affairs Canada (GAC), which is Canada’s Ministry of Foreign Affairs, administers sanctions and maintains the Consolidated Canadian Autonomous Sanctions List. Canada’s Finance Ministry, the Department of Finance, is not involved in sanctions designations, implementation, or enforcement, unlike in the United States, where the Department of the Treasury is the primary administrator of sanctions. 

The Parliament of Canada has enacted legislation authorizing the imposition of sanctions through three acts: the United Nations Act; the Special Economic Measures Act (SEMA); and the Justice for Victims of Corrupt Foreign Officials Act (JVCFOA). 

The United Nations Act enables GAC to implement sanctions against entities or individuals sanctioned by the UN Security Council. When an act of aggression or a grave breach of international peace occurs and the UN Security Council is unable to pass a resolution, Canada implements autonomous sanctions under SEMA; this act is Canada’s primary law for imposing autonomous sanctions and includes country-based sanctions programs. It is also used to align Canada’s sanctions with those of allies. For example, GAC derived its powers from SEMA to designate Russian entities and individuals in alignment with Canada’s Western allies in 2022. Meanwhile, the JVCFOA allows GAC to impose sanctions against individuals responsible for human rights violations and significant acts of corruption, similar to the Global Magnitsky Human Rights Accountability Act in the United States, with sanctions administered by the Office of Foreign Assets Control. 

Once GAC adds entities and individuals to the lists of sanctions, Canadian financial institutions comply by freezing the designated party’s assets and suspending transactions. GAC coordinates with several government agencies to enforce and enable private-sector compliance with sanctions: 

• FINTRAC: Canada’s financial intelligence unit (FIU)—Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)—is responsible for monitoring suspicious financial activities and collecting reporting from financial institutions on transactions that may be linked to sanctions evasion. FINTRAC is an independent agency that reports to the Minister of Finance. FINTRAC works closely with the US financial intelligence unit—Financial Crimes Enforcement Network (FinCEN)—on illicit finance investigations and when sanctions evasion includes the US financial system. For example, FinCEN and FINTRAC both monitor and share financial information related to Russian sanctions evasion and publish advisories and red flags for the financial sector in coordination with other like-minded partner FIUs. 

• OSFI: The Office of the Superintendent of Financial Institutions (OSFI) is a banking regulator that issues directives to financial institutions regarding compliance and instructs banks to freeze assets belonging to sanctioned individuals and entities. FINTRAC also shares financial intelligence with OSFI on sanctions evasion activity under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). OSFI shares intelligence with Royal Canadian Mounted Police (RCMP), the national police service of Canada, if there is evidence of sanctions evasion or other financial crimes. 

• RCMP: Once OSFI notifies RCMP about suspicious activity, RCMP investigates whether the funds are linked to sanctions evasion or other financial crimes. If it finds evidence of a violation of sanctions or criminal activity, RCMP obtains a court order to seize assets under the Criminal Code and the PCMLTFA.

• CBSA: Canada Border Services Agency (CBSA) is responsible for blocking sanctioned individuals from entering Canada. CBSA also notifies OSFI if sanctioned individuals attempt to move cash or gold through border crossings. 

All four agencies work with GAC and with one another on sanctions enforcement. GAC sets sanctions policy, FINTRAC analyzes financial intelligence and shares suspicious activity reports to inform law enforcement investigations, OSFI enforces compliance in banks, RCMP investigates crimes and seizes assets, and CBSA prevents sanctioned individuals from entering Canada and moving assets across borders. 

While financial sanctions are part of Canada’s economic statecraft tool kit, Canadian sanctions power does not have the same reach as US sanctions. The preeminence of the US dollar and the omnipresence of major US banks allows the United States to effectively cut off sanctioned individuals and entities from the global financial system. Canadian sanctions are limited to Canadian jurisdiction and affect individuals and entities with financial ties to Canada, but they do not have the same reach as US financial sanctions. 

Nevertheless, Canadian authorities have been able to leverage financial sanctions to support the G7 allies in sanctioning Russia. For example, in December 2022, under SEMA, Canadian authorities ordered Citco Bank Canada, a subsidiary of a global hedge fund headquartered in the Cayman Islands, to freeze $26 million owned directly or indirectly by Russian billionaire Roman Abramovich, who has been sanctioned by Canada and other G7 allies. In June 2023, Canadian authorities seized a Russian cargo jet at Toronto’s Pearson Airport pursuant to SEMA. 

Figure 4

Export controls

Canada participates in several multilateral export control regimes, including the Wassenaar Arrangement, Nuclear Suppliers Group, Missile Technology Control Regime, and Australia Group. When multilateral regimes fall short in addressing Canada’s foreign policy needs, Canada leverages its autonomous export control list, which is administered by GAC under the Export and Import Permits Act. The Trade Controls Bureau under GAC is responsible for issuing permits and certificates for the items included on the Export Control List (ECL).

Canada Border Services Agency plays a crucial role in the enforcement of export controls. CBSA verifies that shipments match the export permit issued by GAC. It can seize or refuse exports that violate GAC export permits through ports, airports, and land borders. CBSA refers cases to the Royal Canada Mounted Police (CRMP) for prosecution if exporters attempt to bypass regulations. 

Separately, FINTRAC monitors financial transactions that might be connected to the exports of controlled goods and technologies. If FINTRAC detects suspicious transactions, it shares intelligence with GAC and other relevant authorities. Canada’s method of leveraging financial intelligence for enforcing export controls is similar to that of the United States, where FinCEN has teamed up with the Commerce Department’s Bureau of Industry and Security to detect export control evasion through financial transactions. 

While in the United States the export controls authority lies within the Commerce Department, Canada’s equivalent, Innovation, Science and Economic Development Canada (ISED), does not participate in administering export controls. That responsibility is fully absorbed by GAC. 

While Canada has mainly used its export control authority in the context of sensitive technologies, Canadian politiciansand experts have recently been calling on the federal government to impose restrictions on mineral exports to the United States in response to US tariffs. The United States highly depends on Canada’s minerals, including uranium, aluminum, and nickel. Canada was the United States’ top supplier of metals and minerals in 2023 ($46.97 billion in US imports), followed by China ($28.32 billion) and Mexico ($28.18 billion). Notably, President Trump’s recent executive order called Unleashing American Energy instructed the director of the US Geological Survey to add uranium to the critical minerals list. Canada provides 25 percent of uranium to the United States. If Canada were to impose export controls on uranium, the US objective of building a resilient enriched uranium supply chain would be jeopardized. 

However, Canada could not impose export controls on the United States without experiencing significant blowback. Export control is a powerful tool. While US tariffs would increase the price of imported Canadian goods by at least 25 percent, Canada’s export controls would completely cut off the flow of certain Canadian goods to the United States. It would be destructive for both economies, so Canada will likely reserve this tool as a last resort and perhaps work on finding alternative export destinations before pulling such a trigger. 

Figure 5

Tariffs

Canada’s approach to tariffs is governed primarily by the Customs Act, which outlines the procedures for assessing and collecting tariffs on imported goods, as well as the Customs Tariff legislation that sets the duty rates for specific imports (generally based on the “Harmonized System,” an internationally standardized system for classifying traded products). The Canada Border Services Agency is responsible for administering these tariffs. Additionally, the Special Import Measures Act enables Canada to protect industries from harm caused by unfair trade practices like dumping or subsidizing of imported goods, with the Canadian International Trade Tribunal determining injury and the CBSA imposing necessary duties. The minister of finance, in consultation with the minister of foreign affairs, plays a key role in proposing tariff changes or retaliatory tariffs, ensuring Canada’s trade policies align with its broader economic and diplomatic objectives. 

Canada has frequently aligned with its allies on tariff issues, as demonstrated in 2024 when, following the US and EU tariffs, it imposed a 100 percent tariff on Chinese electric vehicles to protect domestic industries. However, Canada has also been proactive in responding to US tariffs, employing a combination of diplomatic negotiations, retaliatory tariffs, and reliance on dispute resolution mechanisms such as the World Trade Organization and USMCA. In the past Canada was also quick to align itself with allies such as the EU and Mexico, seeking a coordinated international response, as was the case in 2018 when the United States imposed a broad tariff on steel and aluminum.

Similar to the United States, Canada offers remission allowances to help businesses adjust to tariffs by granting relief under specific circumstances, such as the inability to source goods from nontariffed countries or preexisting contractual obligations. The Department of Finance regularly seeks input from stakeholders before introducing new tariffs. In 2024, a thirty-day consultation was launched about possible tariffs on Chinese batteries, battery parts, semiconductors, critical minerals, metals, and solar panels, though it has yet to result in any new tariffs. 

Canada’s primary weakness regarding tariffs is its lack of trade diversification. The United States accounts for half of Canada’s imports and 76 percent of its exports. This dependency severely limits Canada’s ability to impose tariffs on the United States without facing significant economic repercussions. Canada’s relatively limited economic leverage on the global stage also complicates efforts to coordinate multilateral tariff responses or to negotiate favorable trade agreements. Furthermore, Canada’s lengthy public consultations and regulatory processes for implementing tariffs hinder its ability to leverage tariffs as a swift response to changing geopolitical or economic circumstances. 

Figure 6

Investment screening

Canada’s investment screening is governed by the Investment Canada Act (ICA), which ensures that foreign investments do not harm national security while promoting economic prosperity. The ICA includes net benefit reviews for large investments and national security reviews for any foreign investments which pose potential security risks, such as foreign control over critical sectors like technology or infrastructure.

The review process is administered by ISED, with the minister of innovation, science, and industry overseeing the reviews in consultation with Public Safety Canada. For national security concerns, multiple agencies assess potential risks, and the Governor-in-Council (GIC) has the authority to block investments or demand divestitures.

Criticism of the ICA includes lack of transparency and consistency, particularly in national security reviews, where decisions may be influenced by political or diplomatic considerations. To better mitigate risks to security, critical infrastructure, and the transfer of sensitive technologies, experts have argued that the ICA should more effectively target malicious foreign investments by incorporating into the review process the perspectives of Canadian companies on emerging national security threats. In response to these concerns, Bill C-34 introduced key updates in 2024, including preclosing filing requirements for sensitive sectors, the possibility of interim conditions during national security reviews, broader scope covering state-owned enterprises and asset sales, consideration for intellectual property and personal data protection, and increased penalties for noncompliance. In March 2025, further amendments were made to the ICA, expanding its scope to review “opportunistic or predatory” foreign investments. These changes were introduced in response to the United States’ imposition of blanket tariffs on Canadian goods.

Figure 7

Positive economic statecraft

Apart from coercive/protective tools, Canada maintains positive economic statecraft (PES) tools such as development assistance to build economic alliances beyond North America. For example, Canada is one of the largest providers of international development assistance to African countries. After Ukraine, Nigeria, Ethiopia, Tanzania, and the Democratic Republic of the Congo were the top recipients of Canada’s international assistance. Canada’s PES tools lay the ground for the federal governments to have productive cooperation when needs arise. Canadian authorities should leverage PES tools to enhance the country’s international standing and increase economic connectivity with other regions of the world. This is especially important amid the US pause on nearly all US foreign assistance. Canada could step up to help fill the vacuum in the developing world created by the Trump administration’s radical departure from a long-standing US role in foreign aid. 

Canadian authorities have already taken steps in this direction. On March 9, Canadian Minister of International Development Ahmed Hussen announced that Canada would be providing $272.1 million for foreign aid projects in Bangladesh and the Indo-Pacific region. The projects will focus on climate adaptation, empowering women in the nursing sector, advancing decent work and inclusive education and training. Earlier, on March 6, Global Affairs Canada launched its first Global Africa Strategy with the goal of deepening trade and investment relations with Africa, partnering on peace and security challenges, and advancing shared priorities on the international stage including climate change. Through this partnership, Canada plans to strengthen economic and national security by enhancing supply chain resilience and maintaining corridors for critical goods. 

Conclusion

Canada’s federal government maintains a range of economic statecraft tools and authorities to address economic and national security threats. While regional factionalism and provincial equities can hinder the federal government’s ability to leverage the full force of Canada’s economic power, threats to Canada’s economic security, including tariffs from the United States, may prove to further unite and align the provinces. The federal government and provincial premiers should work together to meet this challenging moment, consolidating Canada’s sources of economic power and moving forward with a cohesive economic statecraft strategy to protect the country’s national security and economic security interests.

Canada’s leadership and engagement in international fora including the G7, NATO, Wassenaar Agreement, among others, as well as its bilateral relationships, make it well-placed to coordinate and collaborate with Western partners on economic statecraft. Information sharing, joint investigations, multilateral sanctions, and multilateral development and investment can extend the reach of Canada’s economic power while strengthening Western efforts to leverage economic statecraft to advance global security objectives and ensure the integrity of the global financial system. Canada also has a solid foundation for building economic partnerships beyond the West through development assistance and other positive economic statecraft tools. 

Staff

Kimberly Donovan

Director, Economic Statecraft Initiative

Economic Statecraft Initiative GeoEconomics Center

Digital Currencies Economy & Business

Staff

Maia Nikoladze

Associate Director, Economic Statecraft Initiative

Economic Statecraft Initiative GeoEconomics Center

Digital Currencies Eastern Europe

Staff

Lize de Kruijf

Program Assistant, Economic Statecraft Initiative

Economic Statecraft Initiative GeoEconomics Center

Dutch Economy & Business

The authors would like to thank Nazima Tursun, a young global professional at the Atlantic Council’s Economic Statecraft Initiative, for research support.

The report is part of a year-long series on economic statecraft across the G7 and China supported in part by a grant from MITRE.

Issue Brief Dec 20, 2024

Decoding French economic statecraft

By Charles Lichfield

Understanding how France “does” economic statecraft will be crucial for US and other Western policymakers in the months and years ahead.

Economy & Business Eurozone

Issue Brief Sep 11, 2024

North America’s moment: The case for energy cooperation

By Reed Blakemore, Chase Thalheimer, Elina Carpen

Cultivating a United States, Canada, and Mexico energy strategy will bolster the competitiveness and security of North America in an increasingly multipolar market.

Americas Energy Markets & Governance

Report Sep 20, 2023

The US, EU, and UK need a shared approach to economic statecraft. Here’s where to start.

By Kimberly Donovan, Maia Nikoladze, Nicole Goldin, Mrugank Bhusari, Sarah Bauerle Danzman, Ambuj Sahu, and Daniel McDowell

The economic statecraft landscape is becoming more complex as transatlantic partners increasingly leverage the tools to counter transnational threats. There is a growing need to understand how these tools are used, by whom, and when, as well as their intended and real impacts worldwide.

Economy & Business Europe & Eurasia

Housed within the GeoEconomics Center, the Economic Statecraft Initiative (ESI) publishes leading-edge research and analysis on sanctions and the use of economic power to achieve foreign policy objectives and protect national security interests.

Learn More

The post Canada needs an economic statecraft strategy to address its vulnerabilities appeared first on Atlantic Council.

The post Zais quoted in Rudaw on Iraq’s oil pipeline appeared first on Atlantic Council.

The post Zais quoted in Rudaw on Iraq’s legal move on oil companies appeared first on Atlantic Council.

The return of “maximum pressure” is coming at the right time. Iran’s economy is extremely vulnerable. The global oil market’s fundamentals are relatively soft, as strong global supply growth keeps pace with moderating oil demand growth, driving Brent crude futures below seventy dollars per barrel for the first time since September 2024. Furthermore, nearly all of Iran’s 1.6 million barrels per day (mb/d) of crude oil and condensate exports go to a single buyer, China. This means the conditions are ripe for dealing Tehran a crippling blow. 

Removing most of those volumes from the market would come at a time of relatively high spare production capacity in Saudi Arabia and other members of the oil-producing group OPEC+. The estimated 5–6 mb/d of spare capacity (production held off the market due to output cuts) in these countries is more than enough to offset the loss of Iranian barrels. Moreover, the loss of billions of dollars in oil revenues, in addition to the Israeli military’s deterrence, would make it nearly impossible for Tehran to rebuild its smoldering Axis of Resistance and leaves the regime more vulnerable to internal dissent and international pressure.

Current global oil market conditions provide a unique opportunity to escalate pressure on Iran without causing undue harm to consumers or US allies. First, strong production growth from the United States, Canada, Brazil, and other non-OPEC+ countries and tepid demand growth have loosened global oil markets, meaning that there are reduced risks for both US consumers and the administration. Expectations from forecasters such as the International Energy Agency continue to see the market in surplus this year. Saudi-led OPEC+ has been forced to cut supply multiple times since the beginning of 2023 to stabilize prices, and while the group announced it will proceed with its plan to return barrels to the market beginning in April, it reiterated that the “gradual increase may be paused or reversed subject to market conditions.” 

As a result of the conservative production approach since 2023, OPEC+ has built up enough spare capacity to offset a sharp reduction in Iranian exports. While Washington may need to work with Riyadh to convince it to ramp up production more quickly than currently planned, the buffer can insulate consumers from potential price spikes, reducing political risks for the administration.

Second, removing Iranian barrels from the equation may help the United States avoid a harmful price collapse. Oversupply is not just a problem for Iran and other oil-producing countries—it also threatens US oil producers, which require moderately higher prices to sustain production growth and generate returns. A collapse in oil prices—as seen in 2014 and 2020—would disproportionately hurt US energy interests. By removing Iranian barrels from the market, the United States could help stabilize prices, protect its domestic oil industry, and weaken Iran all at once.

Third, Iran’s oil sector is dilapidated. Prior to the reimposition of oil sanctions in 2018, Iran’s crude oil production capacity was around 3.8 mb/d for decades. Over time, that number has fallen due to sanctions and underinvestment. In December 2024, Iran’s Ministry of Oil released a report on the status of the country’s oil sector, noting it would require three billion dollars of investment to recover the 0.4 mb/d of capacity it has lost since 2018. The ministry also admitted that if trends persist, production could decrease to 2.75 mb/d by 2028. At current rates, Iran may have to choose between meeting domestic demand and sustaining exports (and thus maintaining export revenues) as early as 2026.

Finally, disrupting Iran’s energy sector is not just about economics—it’s also about leveraging an effective tool to achieve broader strategic goals. An energy-focused maximum pressure campaign could heighten economic challenges for Iran, potentially amplifying domestic dissent. Tehran will have to divert resources from its destabilizing activities, such as its nuclear program and support for regional proxies, and make real concessions or risk further escalation.

Trump’s return to the presidency presents a historic opportunity to reset the United States’ approach to Iran. Oil markets are soft, and Iran is more vulnerable than it has been in decades. By turning off the taps, the United States can deliver a decisive blow to Iran’s ambitions and set the stage for a more stable and secure future.

Scott Modell is the chief executive officer of Rapidan Energy Group.

The post Why now is the right time for ‘maximum pressure’ on Iran’s oil exports appeared first on Atlantic Council.

Sign up for PowerPlay, the Atlantic Council’s bimonthly newsletter keeping you up to date on all facets of the energy transition.

After ending the remaining pipeline exports through Ukraine, Europe is ready to take the leap to address Russia’s LNG leakage into the market, if competitive deals can be reached with alternative suppliers. The EU is welcoming more US LNG to fill these capacities and is also considering investments in LNG projects abroad to boost diversification and security of supply.  

President Donald Trump fulfilled his promise to roll back former President Joe Biden’s pause on additional LNG project permits—a vital step to unleash future development. However, permitting is not the only driver for additional LNG capacity. Markets make the final call. Any opportunity to create certainty in a turbulent world would reduce risk for potential investors. Choking off Russian LNG on the global market through sanctions is the surest way to signal a new tangible demand trajectory for Europe and beyond.  

But what’s the insurance policy against a resurgence of Russian gas? Unconstrained by the pipeline networks, LNG has the fungibility to reach buyers around the world—often lured in by the highest bidder Because of LNG’s ability to navigate through the global markets, the lasting curtailment of Russian LNG calls for a more comprehensive approach than just an EU ban. Sanctioning LNG where it’s sourced, rather than piecemeal at ports or through a national approach is the most effective way to prevent future supply blackmail from Moscow. The Arctic 2 LNG project sanctions, for example, are a roadmap to impactful project curtailments. Such efforts must be expanded to Russia’s Yamal and Sakhalin-2 LNG project—two significant LNG facilities that have been spared from sanctions to date.  

The Trump administration has left the door open for additional sanctions on the Kremlin, if Putin fails to negotiate a peace deal in good faith. Thousands of rockets attacking Ukrainian civilians, including children, and critical infrastructure clearly signal that Moscow is undermining the United States and seeks to continue its brutalities against the most vulnerable populations.  

By sanctioning Russia’s biggest remaining LNG projects, the United States and Europe can secure a triple win: stimulate domestic gas production and exports, while applying pressure on Moscow and strengthening transatlantic trade relations. 

Olga Khakova is the deputy director for European energy security at the Atlantic Council’s Global Energy Center.

Haley Nelson is assistant director for European energy security at the Atlantic Council’s Global Energy Center.

EnergySource

EnergySource is the Global Energy Center’s (GEC) online publication providing commentary and analysis on developments in the energy and climate sector from a wide-array of thought leaders, politicians, and experts.

Read more

Fellow

Olga Khakova

Nonresident Senior Fellow

Global Energy Center

Geopolitics & Energy Security Europe & Eurasia

Former staff

Haley Nelson

Former Assistant Director, European Energy Security

Global Energy Center

Central Europe Energy & Environment

EnergySource Jan 29, 2025

Bigger than the Berlin Airlift: How NATO’s natural gas shut down a key Russian pipeline 

By Simon Lomax, Morgan Bazilian, and Greg Clough

NATO’s formidable defense of Europe against Russian energy aggression has shut down one of the last natural gas connections between the EU and Russia. These efforts are reminiscent of the 1948 Berlin Airlift, and mark a moment in geopolitics, energy security, and climate progress that merits celebration.

Energy & Environment Europe & Eurasia

EnergySource Dec 6, 2024

Ukraine faces its most perilous winter yet

By Haley Nelson

Ukraine faces its harshest winter yet as temperatures drop, gas stocks dwindle, and its already crumbling energy infrastructure continues to endure Russian missile attacks. Ukraine, with help from its partners, must urgently strengthen defenses of its energy infrastructure, or they risk international financial support being undermined by the continuous onslaught.

Crisis Management Geopolitics & Energy Security

New Atlanticist Jan 6, 2025

The Russia-Ukraine energy divorce offers a chance for Europe to take control of its energy security 

By Olga Khakova

Ukraine’s closure of a pipeline that supplied Russian gas to Europe offers the European Union an opportunity to enhance its economic and energy security.

Energy & Environment Energy Markets & Governance

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post US energy dominance is Putin’s worst nightmare as Russia enters its fourth year of war crimes appeared first on Atlantic Council.

Rick Muncrief is the president and CEO of Devon Energy. This essay is part of the Global Energy Agenda.

Energy is the lifeblood of modern civilization, enhancing the lives of billions of people around the world. It is fundamental to human health, economic opportunity and prosperity, and global security.  

With over four decades of experience in the oil and natural gas industry, I am excited by the opportunity that is in front of us: how to grow the energy system, while making it cleaner and more resilient. As we look to the future, in a world that is becoming increasingly fragmented, it’s crucial to address the energy realities we collectively face.  

The world needs more energy, not less.  

The first reality is that the world needs exceedingly more energy, not less. According to the US Energy Information Administration, global energy demand is projected to grow more than 30 percent by 2050. This surge in demand is fueled not only by the meteoric rise of artificial intelligence and data centers, but also growth in manufacturing and transportation. In emerging economies, energy demand will continue to rise as populations grow and incomes increase, enabling billions of people to drive, access new goods and services, and power their homes.  

Despite significant progress in expanding energy access in the past decades, over one billion people still live in energy poverty, lacking reliable, affordable, productive power. More than two billion people still do not have access to clean cooking fuels or technologies, like natural gas or electricity. Every human being deserves access to the energy they need to thrive—the privileges that so many of us enjoy every day. 

Energy security underpins global security. 

The second reality is that energy security, economic security, and global security are intertwined and interdependent. Diverse, resilient energy systems are necessary to avoid economic disruptions, geopolitical instability, and the likelihood of conflict around the world. The European Union’s (EU) previous reliance on oil and natural gas supplies from Russia highlights the dangers of overweighted dependencies on rogue nations that have the power to weaponize energy to serve as political leverage or tools of coercion in foreign affairs. The devastating invasion of Ukraine and resulting energy supply constraints in the EU also highlight the importance of global energy leadership and international cooperation, as Russian gas supplies were replaced with other sources of energy, including liquefied natural gas (LNG) from the United States.  

Nations with access to diverse, reliable, and affordable energy sources and supply chain inputs—either domestically produced or sourced from exporting international allies around the world—can ensure their people and economies thrive.  

All sources of energy have tradeoffs.  

The third reality is that just as each source of energy has life-changing, transformative benefits that fuel human prosperity, each source also has tradeoffs and negative externalities that should be acknowledged and appropriately balanced in the development of sound public policy and in business.  

To meet growing global demand, we need to produce more energy from traditional and non-traditional sources—and we must produce it more responsibly tomorrow than we do today. For oil and natural gas development, this means committing to reducing carbon and methane emissions. For wind, solar, and battery development, this means minimizing land-use impact and diversifying supply chains. For all energy development, this means ensuring we keep our people and communities safe. We must also be reasonable about the pace, magnitude, and time required to scale new energy resources and enhance existing resources— and the tradeoffs for doing so. 

We cannot prioritize clean energy over reliability and affordability, we cannot pursue reliability and affordability at the expense of the environment, and we cannot develop energy policies and systems that do not account for geopolitical risks domestically and abroad.   

Clear eyes are critical to simultaneously growing energy systems without sacrificing reliability, affordability, or the environment. 

Energy has become a politically polarized flashpoint. It has become “good” versus “bad” and “you” versus “them,” at a time when we should all be coming together to solve the challenges and opportunities in front of us. Now more than ever, we need a pragmatic approach to removing barriers that prevent us from providing the energy access and security the world needs. This includes building infrastructure to move energy where it’s needed most—from oil and natural gas pipelines to transmission lines to LNG terminals to geothermal wells to carbon capture systems and everything in between. In the United States, we need common-sense policies to address meaningful permitting reform that unlocks our vast energy resources and bolsters not only our nation’s energy and economic security, but also those of our allies. While globalism may be receding, energy systems and markets should continue to be highly integrated. We must continue to invest in economic partnerships and trade policies that minimize supply chain disruptions, distort trade flows, slow growth, raise energy costs, and accelerate fragmentation.   

Energy is essential to the technological revolutions unfolding before our eyes and to bringing billions of people into a higher standard of living across the globe. Let us seize this moment to come together in the pursuit of pragmatic and durable policy, technology, and market solutions that grow our collective energy resources to meet the needs of today—and tomorrow.  

Devon Energy is a sponsor of the Global Energy Center. 

Ushering the auto industry into a new energy era

By Jim Farley

Read more

Ukraine can unleash energy investment even amid war

By Volodymyr Kudrytskyi

Read more

The US must assure its energy-secure future

By Meredith Berger

Read more

The importance of US LNG for economic growth and the global energy transition

By Daniel Yergin and Madeline Jowdy

Read more

Southeast Asia aims for sustainability through connectivity

By Kok Keong Puah

Read more

Energy realities require pragmatic solutions

By Rick Muncrief

Read more

Tech and power sector partnerships can accelerate the energy transition

By Arshad Mansoor

Read more

Forging stronger transatlantic energy cooperation

By Dan Jørgensen

Read more

Latin America and the Caribbean are leading the green energy transition

By Andrés Rebolledo Smitmans

Read more

Busting the top myths about AI and energy efficiency 

By Josh Parker

Read more

The small reactor revolution can transform African energy systems 

By Lassina Zerbo

Read more

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

learn more

The post Energy realities require pragmatic solutions appeared first on Atlantic Council.

The scale of political transformation that took place throughout the democratic world in 2024 will be evident when the Group of Seven (G7) convenes under new Canadian leadership later this year. Ultimately, elections last year led to a notable political shift to the right, laying the foundation for a new international energy and climate architecture. 

Global affairs are only part of the story, however. The release of generative artificial intelligence (AI) models like ChatGPT and OpenAI illustrate the emergence of novel challenges with global consequences on par with those stemming from foreign affairs. For a world still largely pursuing a net-zero future, its leaders must now also contend with yet another competitive race between the United States and China, this time for dominance over key aspects of the development, deployment, and governance of a technology central to global military and economic primacy. 

It’s with this backdrop that the Atlantic Council is pleased to present its fifth Global Energy Agenda. To illuminate this period of profound democratic transition, where the urgent need to secure reliable and sustainable energy systems remains a defining issue, this year’s publication shares the insights from leading industry, civil society, and government voices. As in prior years, this collection of essays is complemented by our in-depth analysis of the results of the Atlantic Council Global Energy Center’s annual global energy survey. 

Sign up for PowerPlay, the Atlantic Council’s bimonthly newsletter keeping you up to date on all facets of the energy transition.

Global Energy Agenda

Feb 20, 2025

Global Energy Agenda full survey results

In the fall of 2024, the Atlantic Council’s Global Energy Center surveyed global energy and climate experts to take the community’s pulse on the outlook for geopolitical energy risks, a global energy market in transition, and prospects for the net-zero imperative.

Africa Americas

Ushering the auto industry into a new energy era

By Jim Farley

Read more

Ukraine can unleash energy investment even amid war

By Volodymyr Kudrytskyi

Read more

The US must assure its energy-secure future

By Meredith Berger

Read more

The importance of US LNG for economic growth and the global energy transition

By Daniel Yergin and Madeline Jowdy

Read more

Southeast Asia aims for sustainability through connectivity

By Kok Keong Puah

Read more

Energy realities require pragmatic solutions

By Rick Muncrief

Read more

Tech and power sector partnerships can accelerate the energy transition

By Arshad Mansoor

Read more

Forging stronger transatlantic energy cooperation

By Dan Jørgensen

Read more

Latin America and the Caribbean are leading the green energy transition

By Andrés Rebolledo Smitmans

Read more

Busting the top myths about AI and energy efficiency 

By Josh Parker

Read more

The small reactor revolution can transform African energy systems 

By Lassina Zerbo

Read more