The European Union and the United States are now targeting maritime protection and indemnity (P&I) insurance clubs to limit Russian shipping capacity and cap the price of its oil, meaning we’re finally beginning to see some smart sanctions for a stupid war.

P&I clubs are maritime insurance groups that specialize in open-ended, large-risk claims. P&I insurance is a requirement for all heavy cargo and container vessels. Under the new sanctions, European P&I clubs can no longer offer insurance to a vessel carrying Russian oil at a price higher than $60 a barrel.

Since February 2022, governments and the private sector have been imposing piecemeal sanctions against Moscow, including taking aim at the luxury items of oligarchs and Russian President Vladimir Putin’s inner circle. Yachts and jets were highly symbolic, but sanctions against them weren’t really useful.

Russia then lost access to the global SWIFT payment system. Only after some trade deals with India and China did Russia’s currency somewhat stabilize.