The Patriot Post® · Russia Profits After Sanctions
President Joe Biden promised “crippling sanctions” on Russia after Vladimir Putin invaded Ukraine. Biden proceeded from the assumption that Russia would be brought to its knees by the collective resolve of the international community, and without us having to fire a single shot. We would essentially engage in an international boycott of Russian goods, money, and oil until its military is forced to cease fire and slink home in order to avert complete financial collapse.
This hasn’t happened, although the sanctions regime has been rigorous. Hundreds of Western companies have either cut or significantly scaled back their business ties with Russia, whose banks have been cut out of the international market. Unemployment in Russia is on course to exceed 9%, higher than at any point in the previous decade, and its oil output is now near a two-year low.
Despite all this, Russian energy sales are on the upswing. This is due in part to the sharp rise in oil prices brought on, ironically, by the Russian invasion. Russia reportedly might earn more than $300 billion from energy exports this year, up by more than a third from last year. And the ruble has rebounded to its pre-war price against the dollar.
This doesn’t sound like a crippled Russia, nor a panicky Putin. The Russian-Ukrainian war has entered its eighth week and shows no sign of letting up. Sure, the Russian military has given up trying to seize the capital city of Kyiv. But the Russians are very much intent on seizing and annexing the Donbas territory to the east. Putin fully intends to bring Ukraine under the yoke of his Russian empire, piece by piece if necessary. The remarkable resistance of the Ukrainians hasn’t changed his mind, and neither have Western economic sanctions.
Instead, Russia appears ready to buckle down and weather the economic storm. “It takes time for the economy to adjust,” said Russian Prime Minister Mikhail Mishustin last week. “It is impossible not to have at least half a year to reorganize in such a blow.”
Economic sanctions are an imperfect weapon. They tend to work slowly, allowing their intended target to adjust and lessen the blow. And sanctions don’t always force an autocrat to heel. That’s because autocrats, by definition, don’t care an awful lot about the quality of life of their citizenry. And shrewder autocrats like Putin tend to plan for and sanction-proof the critical elements of their economy — those that maintain their military and keep them in power.
Furthermore, international sanctions are only effective if the international community stays the course. China, which was never on board against Russia, has agreed to purchase more Russian energy to offset its loss of market access. And India and Western Europe have proven weak in the knees when it comes to pursuing alternatives to cheap Russian energy. Their resolve may be stiffened if the claims of Russian atrocities are proven true, but it’s a long, lonely trail between signaling one’s virtue and displaying the courage of one’s conviction.
Biden needs to change the game. If sanctions aren’t working, why not replace Russia in the world energy market? America is awash in oil and natural gas. We could sell it more cheaply than Russia, make more money doing so, and take better care of the environment along the way.
That’s what real international leadership would look like.