Nato's choice: Stop funding Putin, time to win the war

French Hill

When NATO leaders gather in Ankara, Turkey, on Tuesday, they will offer familiar words of resolve on Ukraine, reiterating that Russia poses a threat to their collective security.

The statements will be welcome, but they will not end the war. For more than four years, NATO has sought to manage the conflict in Ukraine rather than win it decisively. In Ankara, the alliance members must set their sights higher than on another declaration of allied unity.

The NATO summit should commit to breaking the Russian war economy and ending Moscow’s ability to fight abroad. That requires admitting an uncomfortable truth: Western sanctions have constrained Russia, but they have not cut off the fossil fuel revenues that sustain President Vladimir Putin’s war machine.

The numbers show the scope of the failure. In May, Russia’s daily fossil fuel export revenues rose to roughly 726 million euros, or around $830 million, up 2 per cent from April. Crude oil alone generated about 362 million euros daily. The European Union, despite real progress since 2022, remains the largest buyer of Russian gas. Turkey, a longtime NATO member and this year’s summit host, still counts as a major buyer of Russian oil products.

It’s not that allies have failed to support Ukraine. Europe has cut its dependence on Russian gas from roughly 45 per cent of imports before the invasion to about 12 per cent in 2025 and is moving toward phasing out Russian gas entirely. It has banned Russian coal. Turkey has supplied Ukraine with drones and helped broker safer navigation in the Black Sea. These efforts deserve recognition, but they sit uneasily with its continued imports from Russia that let the war drag on indefinitely.

The hesitancy has been understandable. NATO leaders flinched at taking a tougher approach in the immediate aftermath of Russia’s full-fledged invasion in 2022, worried that the disruption in energy markets would be too costly. But the costs of indecisiveness have been worse, with more than 15,000 civilians killed and nearly $600 billion expected to be required to rebuild Ukraine.

Recent events offer an opportunity to act. At roughly nine million barrels a day, Russia’s crude production represents less than 9 per cent of global oil demand. With the Strait of Hormuz reopening and Persian Gulf supplies slowly returning to the market, the economic and political effects in NATO countries of cracking down on Russia will be softened. NATO allies have endured much greater impacts from markets constrained by the Iran war and are positioned to absorb the fallout from tougher sanctions on Moscow.

The United States has reimposed sanctions it temporarily lifted on Russian oil during the war. Allies that still rely on Russian energy should use the Ankara meeting to commit to a rapid, orderly exit, backed by alternative supplies from the United States and other partners. But the transition must be swift; it must not become another way to delay.

Next, NATO must target non-Western buyers like China — the top importer of Russian crude and coal. These transactions rely on foreign financial institutions willing to process deals Western banks refuse to touch. As Russia adapts, these non-Western enablers provide vital economic oxygen.

NATO must agree to impose secondary sanctions on the apparatus facilitating Russia’s energy trade, from Chinese and Indian banks to Middle Eastern trading houses. Severing these institutions from the dollar and euro forces a stark choice: do business with the West, or with Russia, but not both.

Congress is ready. The House Committee on Financial Services, which I chair, passed the bipartisan PEACE Act to penalise financial institutions facilitating Russian energy deals. A NATO-wide push modelled on this legislation would alter the calculus for foreign banks, including those in China that cannot risk losing Western market access just to clear Russian crude.

Threatening exclusion from the Western financial system will change behaviour from Shanghai to Dubai. Financial institutions should no longer get a free pass while funding the destruction of Ukrainian victories.

Furthermore, the PEACE Act authorises seizing $5 billion in frozen Russian sovereign assets for Ukraine's defence. While $5 billion won't win the war alone, it sets a precedent for European allies holding roughly €210 billion in Russian funds. Freezing assets is no longer enough; we must seize them. Russia, not Western taxpayers, must pay for its aggression.

The New York Times