Sanctions signify penalties imposed by one or a number of countries for breaking international law or to stop aggression. US, EU, UK, Canada, Japan, & New Zealand have imposed sanctions on Russia after its invasion of Ukraine.
In order to choke the main artery of the Russian economy, the US has banned all Russian oil and gas imports, in addition to banning the export of specific refining technologies for modernizing oil refineries.
Likewise, the UK has announced to phase out the import of Russian oil by the end of the year. Significantly, UK’s imports account for 8 percent of total UK oil demand. Moreover, the UK is also a significant producer of both crude oil and petroleum products.
Hence it can manage to offset its dependence on Russian oil and gas by finding alternate sources by end of 2022. The 27 members European Union ( EU ) is, however heavily reliant on Russia for about 40 percent of its natural gas, 27 percent of its oil imports, and 46 percent of its coal imports.
It is worth tens of billions of dollars a year. It has also announced switching to alternative supplies sources before 2030. As a manifest sanction against Russia, Nordstream 2 gas pipeline permission has been put on hold by Germany.
Financial Measures (sanctions)
Western countries have frozen assets of the Russian Central Bank as punishment in order to stop it to use $ 630billion reserves. In addition, Central Bank has been stopped from using its services for International Services.
Some Russian Banks have been restrained from the international financial system Swift. Moreover, Western allies plan to impose restrictions on Russia’s Central Bank to limit its ability to finance Putin’s war efforts.
Nevertheless the EU despite its dependence on Russia’s oil and gas ‘imposed several packages of sanctions on Russia from Europe i.e. ban on the export of refining technologies to Russia, closing of air space to Russian aircraft, ban on imports from Belarus (Russian ally) i.e. tobacco, cement, iron, and steel.
EU has also announced the freezing of any assets of Putin and his Foreign Minister. As a punitive measure for Russia US, Europe, & Canada has also banned all Russian flights to use their air space.
As a result of the hard-hitting sanctions to cripple the Russian economy, a number of International Firms like McDonald’s, Coca-Cola & Starbucks have stopped business in Russia.
Switzerland has disregarded its neutrality and has announced to adopt all sanctions that the EU has imposed on Russia as a result of its aggression against Ukraine. Canada has also imposed severe sanctions targeting Russian oligarchs, individuals, elites, major banks, in addition to canceling all the work permits.
Japan also announced its determination for sanctions against Russian financial institutions, individuals, etc, and for withholding export of military use goods to Russia.
South Korea while joining Western countries’ sanctions in condemnation of the Russian invasion of Ukraine, reacted by banning exports of strategic items and blocking some Russian banks from use of Swift.
Undeterred by sanctions, in retaliation Russian Deputy Prime Minister Alexander Novak, recently made an explicit threat to cut off gas supplies to Germany through Nordstream 1 pipeline.
It may be highlighted that turning off the gas/oil supplies by Russia would lead to catastrophic effects for the global market. Prices of oil could shoot up-to$ 300 a barrel. Significantly the prices have continued to surge after the Russia Ukraine war broke out.
Petrol, electricity, and gas bills have sky-rocketed. In case of escalation of Ukraine conflict, Russia could unleash a new wave of cyberattacks on Western energy, finance, and communications as well as infrastructure.
US cyber security and infrastructure security agencies have issued warnings about potential cyber-attacks. The multinationals have been warned to be on high alert.
There is a lingering fear amongst analysts and strategists that the ongoing fierce conflict in Ukraine and Russia’s ‘escalate to de-escalate strategy’ could lead to nuclear strikes on the Russian show of strength and its assumption that the West will back down.
Russian President. Vladimir Putin has placed Russian nuclear forces on alert and Russian Foreign Minister Lavrov threatened nuclear retaliation in case the West further intervened in Ukraine.