Indian Prime Minister Narendra Modi (R) meets with Russian President Vladimir Putin in New Delhi Everyone is watching the Strait of Hormuz right now. The burning tankers, the oil price ticking above $100, the White House press conferences. That’s understandable.
However while that drama plays out, something arguably more consequential is happening in the background and it’s barely getting a line of coverage. Russia is dismantling the Western sanctions architecture. Methodically.
And with considerable success. When the West sanctioned Russia in 2022, the logic was straightforward, cut Russia off from the dollar system, freeze it out of SWIFT, cap its oil revenues, and eventually the economic pain would force a political reckoning. 4 years later, that logic has a serious problem.
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India and Russia have shifted roughly 90% of their bilateral trade into rupee-rouble settlements, bypassing the dollar system almost entirely.Trade turnover between the two countries has gone from approximately $13 billion in 2021 to $68 billion in 2024-25. India and Russia have shifted roughly 90% of their bilateral trade into rupee-rouble settlements, bypassing the dollar system almost entirely. Trade turnover between the two countries has gone from approximately $13 billion in 2021 to $68 billion in 2024-25.
The architecture behind this matters. India’s Reserve Bank has streamlined Special Rupee Vostro Accounts, allowing Russian oil exporters to hold rupees directly in Indian banks with no dollar conversion, no SWIFT dependency, no Western compliance exposure. The International North-South Transport Corridor, a 7,200km multimodal network linking Russia to India via Iran and Central Asia, has reduced transport costs by $2,500 per 15 tons compared to traditional routes.
Dubai has become Russia’s primary Western-facing financial hub, the node through which money moves, contracts clear, and sanctions are quietly absorbed. Tens of thousands of Russians have relocated to the UAE. Emirates NBD, Dubai’s main government-owned bank, recruited Russian bankers to set up a dedicated unit for managing money from wealthy Russians.UAE exports of electronic components to Russia grew more than sevenfold in the first year after sanctions were imposed.Washington has been trying to negotiate with Dubai to stop this.
It has not stopped. Emirates NBD, Dubai’s main government-owned bank, recruited Russian bankers to set up a dedicated unit for managing money from wealthy Russians. UAE exports of electronic components to Russia grew more than sevenfold in the first year after sanctions were imposed.
Washington has been trying to negotiate with Dubai to stop this. What the Iran war did (and this is the part nobody is discussing), is stress-testing this architecture under real pressure. When the Strait of Hormuz shut down and global energy markets went into freefall, Russia’s alternative financial plumbing didn’t collapse.
The rupee-rouble corridor kept moving. Dubai kept clearing. The shadow fleet kept sailing.
In December 2025, Russia and Iran formally signed a three-year coordination programme to align their resistance to Western sanctions. While everyone was watching the bombs fall, Moscow and Tehran were signing paperwork. This is what winning a sanctions war looks like.
Not a dramatic victory. A slow, structural erosion of the other side’s tools.
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