Litmus test: How to tell whether the Trump administration is serious about peace in Ukraine

Ahead of this weekend’s G7 meeting in Canada, European leaders might wonder whether there is anything they could say to persuade President Donald Trump to try the one thing he has not done in his talks over the war in Ukraine: put pressure on Russia. One approach could be to note that he has four sources of leverage that were less, or not at all, available to President Joe Biden. 

Three of these tools enjoy broad support among European governments themselves; the fourth is more contentious. Yet the chance for Trump to look stronger than his predecessor may tempt him in a way that other arguments have not. There are few, if any, signs that he will take up the opportunity, but how he responds to this new line of argument may tell leaders something new about the president’s approach to Russia.

The first form of new and conspicuous US leverage lies in taking more Russian oil off the market. Revenues from oil and gas sales account for roughly one-third of Russia’s budget, at least one-third of which is in turn dedicated to military spending. This does not capture the full importance of oil sales to Russia’s war effort. Russia’s non-energy sources of revenue such as windfall taxes, growth in industrial production, and exit taxes from departing Western companies are faltering.  Even with a growing budget deficit, Russia can finance the war for at least a year, but the prospect of a collapse in these revenues will remove a crucial part of its fiscal strategy.  

This contrasts starkly with the situation early after the full-scale invasion of February 2022, when I led the State Department’s sanctions and (starting in late 2023) European policy offices. The US and our partners then shied from taking Russian oil off the market for fear that price spikes would gut global support for Ukraine. Russia anyway had other sources of income from large, one-time windfalls in gas and agricultural revenues that followed its 2022 further invasion of Ukraine. In January 2025, however, increases in Saudi and US production and weaker global demand enabled the US to remove a small but material amount of Russian oil from the market, along with up to half of Russia’s fleet of sanctions-insulated “shadow” tankers. Global oil prices have since fallen.  Russia’s oil and gas revenues have already fallen 35% year-on-year. It is now earning probably $20 a barrel below the price (about $70 a barrel) that Moscow had initially pencilled into its budget, while it faces higher export costs.

There is room to do more. The administration can immediately help Nordic and Baltic states stop much of the remaining shadow fleet by enforcing existing safety, insurance, and other rules and by making sure that all tankers (shadow and leased) carrying Russian oil abide by strict and lower oil prices. A bolder step would be to stop buyers and banks from accepting or financing Russian oil, either completely or if sold above a new price that will keep dropping as Russia keeps fighting. European Commission president Ursula von der Leyen is rumoured to be preparing proposals along these lines for the G7 discussion. Agreeing to these steps could help a Trump administration that is facing overwhelming calls from Congress for tougher, mandatory sanctions on Russia. If the president acts quickly and on his own authority he could adjust these measures to Russian behaviour in the same way that he uses the threat of tariffs.

Trump has more leverage than Biden here because, after three years of war, Russia needs to earn more of what it spends on defence

Trump has more leverage than Biden here because, after three years of war, Russia needs to earn more of what it spends on defence. About half of Russia’s sovereign assets have been immobilised by the G7, and the liquid assets of its National Wealth Fund have dropped by two-thirds since early 2022, leaving approximately $36 billion. Meanwhile, battlefield losses have depleted vital military items like tanks and artillery tubes. While Russian arms production is increasing and the country receives key materiel from North Korea and Iran, it must pay for components from China and elsewhere at inflated prices.

A second tool is to ensure that Ukraine can defend itself and defang Russia. The spectacular Ukrainian drone attack on June 1^st shows that the country can, as its strategists say, hit the archer and not just the arrow. Russia has sought to answer, and Ukraine should be confident that it will have the information it needs, along with more missiles for air defence. The president might be able to persuade the countries he recently visited that they could keep fewer missiles in their stockpiles, freeing up others for Ukraine. This approach was not available in 2023 and 2024, when states in the Gulf held their missiles in anticipation of an Iranian attack on Israel using their airspace. Now, their willingness to move some air defence assets would show the extent of Trump’s (and their) confidence in recent US diplomacy toward Iran.

The third option is to announce that the administration will no longer pursue commercial opportunities in Russia. This may be the most difficult point for the president, who has sought business in Moscow since at least 1987 and mentions commerce in almost each public comment about the relationship. It may be why he made Steve Witkoff, a commercial negotiator by profession, his main envoy to Russia. The prospect of sanctions relief tied to these deals creates all the wrong incentives, however, and by now it should be clear that deals made through the Witkoff channel will not constrain Russia. Vladimir Putin’s tenure has been defined by the insistence that strategic assets be controlled by the state or trusted insiders. From the Russian standpoint, any deals made now would be a gratuity for helpful Westerners but not grounds to change policy.

On these three tools—targeting more Russian oil, guaranteeing intelligence to Ukraine and mothballing commercial ambitions—most European governments are likely to be supportive. On the fourth, they would need to be persuaded. European policymakers have been cautious about using the $300 billion in immobilised Russian sovereign assets to reinforce Ukraine. In part, they were (and still are) concerned about the attractiveness of European assets to global investors. But another factor was that, in the first years of the full-scale war, even many of those Russian assets that were booked in Europe were still invested. So, in partnership with the Biden team, European governments focused on using the interest that would be earned in the G7 and the rest of the EU to produce a $50bn loan package for Ukraine, starting in December 2024.

Now, however, things are different. The Trump administration has shown little support for further US assistance to Ukraine, so tapping the Russian funds may be the least bad option, especially because many European governments agree that Russia will owe reparations once the war ends. Also, as Philip Zelikow of the Hoover Institution has argued, many of the relevant investment periods have now ended, converting the assets to cash in custodial accounts, including perhaps another $50 billion in US dollars.

The Trump administration could urge that all these funds be directed to purposes it favours, including the purchase of weapons for Ukraine from the US and others, and investment in arms production in Europe and Ukraine itself. This touches on a tense part of the relationship between the US and EU, but could be part of a deal on trade because it would reduce the US deficit in goods with Europe. As Zelikow notes, because the funds are now held in banks and some in US dollars, US sanctions would be effective leverage. With those in place, the holders of the funds could say that they were legally required to transfer the funds for the benefit of Ukraine.

Taken together, these opportunities to increase the pressure on Russia are the fruits of constant effort by Ukraine and the coalition supporting it since February 2022. I regret that they are ripening only after the Biden team left office, but that is what it means to work in a democracy. The choice for the Trump administration is whether to adapt its approach to Russia, using these tools, or to stick with its initial indulgence of Russia despite different circumstances. European policymakers will learn much about its instincts from whether or not it changes course. But they also have agency—by urging the US to take these actions and by moving ahead on their own if necessary.