Five different ways West’s sanctions are hitting Russia amid Ukraine war
As Russia commenced its aggressive assault against Ukraine on February 24, the West and its allies imposed sanctions on various sectors against Moscow. To deter Russian aggression in Ukraine, the Biden administration gloats that the penalties put in place by the United States and its allies on Russia are unprecedented for a country of that size. According to the State Department, since Russian President Vladimir Putin initiated the battle in late February, the US government had issued around 1,500 new and 750 revised sanctions lists, New York Times reported. Additionally, the department reported that 37 nations had joined the sanctions alliance.
Even though the sanctions are imposed, they, however, have not had the detrimental effect that Western leaders had hoped for. According to the New York Times report, oil and gas exports, which are the foundation of Russia’s economy, are mostly unaffected. Despite boycotts and sanctions by the US and other allies, global oil prices rose after the conflict started, and Russia is on course to make more money from oil sales this year than it did in the year 2021. Furthermore, a partial European oil embargo which will enter into force in December and export restrictions on crucial technologies might lead Russia’s economy to worsen in the coming months.
Some of the key sectors in which Western nations have imposed sanctions on Moscow:
Western sanctions on Russian trade
Trade with Moscow has been subjected to limitations from the European Union, the United Kingdom, and the US. These countries have stopped selling luxury goods to Russia and are collaborating with allies to prevent Russian acquisitions of semiconductors and other cutting-edge technologies. However, governments have been more hesitant to impose restrictions on Russia’s energy trade due to worries about inflation and economic expansion. And other nations still buy Russian nickel, uranium, diamonds, and a variety of other raw resources, the New York Times reported.
Further, the steep decline in Russian imports, on the other hand, is a result of both the decision of international corporations to break connections with Russia and the waning demand for consumer goods in the nation as its economy weakens. Russian access to imported goods has been hampered by the discontinuation of major shipping lines such as Maersk and MSC from serving the country.
Western sanctions on financial transactions
The main banks in Russia such as Sberbank, Alfa-Bank, VTB Bank are subject to sanctions enforced by the Treasury Department, which bans those institutions from transacting business with financial institutions and businesses abroad that seek to avoid penalties imposed by the US government.
Due to the necessity of using the global financial system for transactions, these regulations also make it difficult for many Russian businesses to conduct business. According to the State Department, the institutions targeted by the sanctions hold 80% of Russia’s financial assets. According to the State Department, $300 billion in assets held by the Russian central bank in institutions throughout the globe have been blocked by the United States and its allies.
Western sanctions on tech exports and businesses
The US and its allies want to limit technology supplies to Russia’s military and energy sectors, as well as other critical industries, through sanctions and export controls. The intention is to make it difficult for Moscow to start and fund a conflict, New York Times reported.
All international shipments of semiconductors, computers, lasers, telecommunications gear and other technological commodities to Russia have been outlawed by the coalition’s member states. Additionally, they have slapped sanctions on Tactical Missiles Corporation, which manufactures the missiles the Russian military is employing in Ukraine.
Western sanctions on energy
Washington and its allies have struggled to reduce the amount of money that Russian state-owned firms have made from selling energy. Russia uses a network of pipelines to sell and ship natural gas to countries in Europe and Asia. Governments have been hesitant to enact energy prohibitions that would wind up driving up market costs as global inflation surges.
Given that the United States and Britain purchase so little Russian oil, their bans have had minimal effect on Russia’s overall oil earnings, especially in light of the recent spike in oil prices. According to the New York Times report, the North Atlantic Treaty Organization member Turkey has doubled its imports of Russian oil this year
Further, the European Commission in May declared its intention to stop all purchases of Russian fossil fuels by 2027. In December, European Union restrictions on shipping insurance and seaborne supplies of Russian oil are expected to go into force.
Western sanctions on oligarchy and Russian elites
Numerous members of their families as well as hundreds of Russian government employees, business leaders, and billionaires have been subject to sanctions under the Biden administration. Some of the top members of the Russian administration, including President Vladimir Putin, his foreign minister Sergey Lavrov, and the country’s top two military commanders, Sergei Shoigu, the minister of defence, and Valery Gerasimov, the head of the general staff, were all punished.
Restrictions have also been imposed on the 170 members of the upper house and all 450 members of the lower house of the Russian Parliament, New York Times reported. Restrictions imposed by the United States on individuals often restrict them from accessing whatever assets they may have here, stop them from doing business with Americans, and refuse them entry visas.