"Putin's regime survives on the hard currency provided by oil revenues. His gas business makes only small sums by comparison. And Russia has little else to sell. Sanctions, after four years of incremental, step-by-step policymaking since Russia's full-scale invasion of Ukraine, have acted like a tourniquet on the Russian economy."
"It's a measure of how well sanctions have begun to work that Russian public authorities can no longer deny the impact on spending. The White House can take credit for some of the most severe sanctions. Last autumn, the US froze the assets of leading Russian oil companies Rosneft and Lukoil, adding that foreign banks and shipping organisations that help Russian oil tankers may face secondary sanctions."
Trump temporarily lifted restrictions on India's Russian oil purchases to manage global oil prices and protect his political popularity. This decision reflects the strategic use of oil as a geopolitical tool. Russia's economy heavily depends on oil revenues, with sanctions over four years creating significant economic strain. Moscow has resorted to hiding state debts through local entities, and even wealthy Moscow city announced its first investment cuts since the pandemic, reducing spending by 10% and cutting municipal staff by 15%. These indicators demonstrate sanctions' effectiveness in constraining Russian government finances. The US previously imposed severe sanctions on major Russian oil companies Rosneft and Lukoil, threatening secondary sanctions against foreign banks and shipping organizations assisting Russian tankers.
#oil-sanctions #us-russia-relations #geopolitical-strategy #economic-sanctions-effectiveness #energy-markets
Read at www.theguardian.com
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