Economic Deterrence: Can Money Really Prevent War?

When we think about deterrence, we often picture tanks, fighter jets, or nuclear weapons. But recent events in Europe show that money can be just as powerful. The Guardian reports that the EU has imposed its 19th set of sanctions against Russia, including a phased ban on Russian liquefied natural gas and restrictions on over 100 “shadow fleet” vessels used to bypass oil price caps. It’s a clear example of economic deterrence in action, where money itself becomes a weapon.

At its core, economic deterrence works by influencing the costs and benefits of military aggression. It’s not about punishing for the sake of punishing; it’s about making the stakes so high, or the rewards so uncertain, that a state thinks twice before starting a conflict. Analysts often break it into three forms:

1) Punishment:

Imposing economic costs, like sanctions or trade restrictions, to destabilise the target state’s economy. For Russia, banning gas imports and restricting financial access hits both state revenue and domestic stability. In practice, this approach has had tangible effects: between early 2021 and mid-2025, the EU-27 reduced Russian oil imports by over 90% and cut natural gas imports by more than half. While Russian LNG imports rose, they accounted for a smaller share of the EU’s total LNG, as the bloc replaced pipeline gas with LNG from the US, Qatar, and Norway.

2) Denial:

Limiting access to resources and technologies needed for military action. The EU’s measures against shadow fleet vessels, which transport oil at prices above the G7 cap, effectively denies Russia the ability to profit from aggressive moves.

3) Diminution:

Reducing the benefits of aggression by withdrawing investments or trade from contested areas. It’s less flashy than tanks, but it chips away at the incentives to wage war.

Reading about these sanctions made me pause. I realised that we often underestimate the power of economic levers in international politics. As an undergraduate student studying international security, it sparked a question: Are sanctions enough to deter aggression, or are they mostly symbolic?

It is clear these issues aren’t abstract. Economic deterrence is where theory meets messy, real-world politics. It challenges us to think critically about strategy, ethics, and efficacy. My hope is that by connecting recent news to core concepts, readers can not only understand what’s happening but also reflect on why it matters, both globally and personally.

In short, deterrence doesn’t always strike loudly, sometimes, it quietly recalibrates incentives. And in an interconnected world, money can be as mighty as missiles.