Trump could trigger a financial crisis in Russia — if he wants to — but has backed off from his threat of ‘very severe consequences’
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"Trump can squeeze the Russians; he seems to forget that the United States holds the cards, not Moscow."
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real estate
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August 16, 2025
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Fortune
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·Ukraine invasionTrump could trigger a financial crisis in Russia — if he wants to — but has backed off from his threat of ‘very severe consequences’By Jason MaBy Jason MaWeekend EditorJason MaWeekend EditorJason Ma is the weekend editor at Fortune, where he covers , the economy, finance, and housing.SEE FULL BIO U.S
President Donald Trump welcomes Russian President Vladimir Putin to Joint Base Elmendorf-Richardson in Anchorage, Alaska, on Friday.Getty ImagesPresident Donald Trump and Russian President Vladimir Putin their meeting in Alaska on Friday without a ceasefire deal
Despite Trump’s earlier threat that Moscow would face “very severe consequences” if the summit didn’t duce an agreement, he said he would hold off on imposing new sanctions
But a tougher U.S. crackdown on tankers dering Russian oil would cripple Putin’s war machine, an expert said
The U.S. holds immense leverage over Russia’s economy and ability to continue waging war on Ukraine, but President Donald Trump has backed off from earlier warnings that lack of gress on a ceasefire would result in harsh penalties for Moscow
Trump and Russian President Vladimir Putin their highly anticipated meeting in Alaska on Friday without a deal
On Saturday, Trump shifted his stance toward reaching a more comprehensive peace agreement between Russia and Ukraine, mirroring Putin’s position, rather than a ceasefire
He also reportedly backed Putin’s idea for Ukraine to give up territory it holds in exchange for a Russian mise that it won’t attack again
That marked a big swing from his rhetoric leading up to the Alaska meeting, as he threatened “very severe consequences” for Russia if Putin didn’t agree to a ceasefire
When asked why he didn’t through, Trump said he would hold off on any new penalties and suggested the threat remains on the table as diplomacy plays out. “Because of what happened today, I think I don’t have to think that now,” he told Fox News. “I may have to think it in two weeks or three weeks or something, but we don’t have to think that right now.” Trump had previously warned Russia’s oil sector could face secondary sanctions
Oil and gas generate the bulk of the Kremlin’s revenue, and the U.S. could exploit this critical vulnerability
In particular, cutting off the “shadow fleet” of tankers that der Russia’s oil under the radar would send the war economy into a “deep financial crisis,” according to Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance
After the Biden administration sanctioned nearly 200 ships in January, just before Trump returned to office, their activity collapsed, he pointed out in a Substack post on Saturday
But there are 359 more ships that have already been sanctioned by the European Union or United Kingdom, but haven’t been targeted yet by the U.S. “Sanctioning these ships would be a hammer blow to the Russian war machine,” Brooks wrote. “There would undoubtedly be a sharp fall in the Urals oil price, reducing the flow of hard currency to the Russian state, and the Ruble would most ly depreciate significantly.” Meanwhile, foreign policy expects have called the Alaska meeting a success for Putin as he was able to avoid severe consequences from Trump while also buying time for his military to make more battlefield gains in Ukraine
But Melinda Haring, a nonresident senior fellow at the Atlantic Council’s Eurasia Center, also noted that Trump has significant leverage over Russia. “Let’s hope that Trump sees through Putin’s endless appetite to talk and tires of the Russian dictator’s pseudo-historical lectures,” she wrote in a blog post. “Trump can squeeze the Russians; he seems to forget that the United States holds the cards, not Moscow.” Oil and gas revenue tumbled 27% in July from a year ago, and Russia is running out of financial resources as war-related spending deepens its budget deficit
The National Wealth Fund, a key source of reserves, has dwindled from $135 billion in January 2022 to just $35 billion this past May and is expected to run out later this year. “Russia’s economy is fast apaching a fiscal crunch that will encumber its war effort,” economist and Russia expert Anders Åslund wrote in a ject Syndicate op-ed last week. “Though that may not be enough to compel Putin to seek peace, it does suggest that the walls are closing in on him.” Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world
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