Sanctions and the Economic War

The Sanctions Regime

The sanctions imposed on Russia since February 2022 are the most comprehensive ever levied against a major economy. Key measures include:

• Financial: Freezing approximately $300 billion in Russian central bank reserves held abroad; cutting major Russian banks from SWIFT
• Trade: Export controls on semiconductors, advanced technology, and dual-use goods; EU embargo on Russian seaborne oil
• Individual: Asset freezes and travel bans on over 1,500 Russian oligarchs, officials, and entities
• Energy: G7 price cap on Russian oil at $60/barrel; EU phase-out of Russian gas imports

The goal was to impose costs severe enough to change Russia's calculus. The immediate impact was dramatic: the ruble crashed 40% in the first weeks, the Moscow stock exchange closed for a month, and inflation spiked.

Are Sanctions Working?

This depends entirely on how you define 'working.'

Sanctions have not ended the war or forced a Russian withdrawal. Russia's GDP contracted only 2.1% in 2022 — far less than predicted — and grew in 2023, buoyed by military spending and energy revenues redirected to India and China. Russia has found workarounds: importing sanctioned chips through third countries, using shadow fleets of tankers to circumvent the oil price cap, and deepening economic ties with non-Western nations.

Sanctions have constrained Russia's long-term economic trajectory. Russia has lost access to Western technology critical for its energy sector, aviation (planes cannot get spare parts), and advanced manufacturing. Brain drain has been severe — an estimated 500,000-700,000 Russians left the country in 2022. The IMF projects Russia's long-term growth will be significantly below pre-war trends.

The debate mirrors a broader question in international relations: sanctions rarely achieve their maximal stated goal (regime change or war termination), but they can impose meaningful costs and constrain future capabilities.