Escrow and Russian Oil Super-Profits: Revisiting an Old Sanctions Tool

28 Apr 2026 12:46 PM

The war in the Middle East has boosted oil profits for Russia and Iran and neutered the price cap. It is time to revisit the past.

If those seeking to restrict the oil profits of Russia had felt they were making progress in early 2026, with the recent designation of Russian oil producers Lukoil and Rosneft as part of efforts to restrict Russian oil sales and a growing willingness of European militaries to board vessels seeking to circumvent sanctions restrictions, the war in Iran and effective closure of the Strait of Hormuz has turned the tables. With oil trading around $100 per barrel, super-profits are pouring into the coffers in Moscow.

For Ukraine’s allies in Europe, this is particularly galling given their exclusion by President Trump from any consideration of the impact of his venture in Iran, and the resulting energy shock bestowed on the world which has opened up opportunities for Russia to cash in.

Capitals across Europe are caught in an invidious position neither of their own making or within their own control. Meanwhile, what little they can do has rung hollow. For example, the tough talk of boarding sanctioned and shadow fleet vessels carrying Russian crude has been, for the most part, empty. In short, and as pointed out by this author recently, the West’s sanctions strategy has lost its way. But that does not need to be the case, and although many argue the oil price cap (OPC) should be consigned to history and a full maritime services ban should be introduced, there may actually now be an opportunity to employ the OPC as a mechanism for restricting the bonus Russia is earning from the war in the Middle East, but by focusing greater attention on financial, as opposed to oil, flows.

Click here for the full press release