International energy sanctions have created a trap where companies get in trouble if they follow the law and get sued if they don't.
March 24, 2026
Original Paper
Energy Sanctions Hegemony
SSRN · 6389079
The Takeaway
While the US uses sanctions to control global energy markets, foreign courts often refuse to recognize those sanctions as a valid reason to break a contract. This leaves companies in an impossible dilemma: follow US sanctions and face multi-million dollar breach-of-contract lawsuits abroad, or honor the contracts and face criminal prosecution at home.
From the abstract
<p><span>While the United States leverages its global financial dominance to deploy unilateral energy sanctions as a primary economic tool, <span>these sanctions create an impossible dilemma for U.S. energy companies: comply with sanctions and breach foreign contractual obligations or honor their contractual </span><span>obligations and face prosecution at home.</span> This extraterritorial assertion of regulatory power systematically undermines the foundational principles of contract law, disru