Two years ago this Saturday, Russian President Vladimir Putin ordered the full-scale invasion of his Ukrainian neighbor. On the eve of the anniversary (for lack of a better word), the Biden administration rolled out its most comprehensive sanctions package to date.
A total of 500 Russian individuals and entities will now be barred from conducting any business with United States individuals or firms, and any assets they may have under U.S. jurisdiction will be frozen.
“These sanctions will target individuals connected to [Russian opposition leader Alexei Navalny’s] imprisonment as well as Russia’s financial sector, defense industrial base, procurement networks and sanctions evaders across multiple continents,” President Joe Biden said in a statement. “They will ensure Putin pays an even steeper price for his aggression abroad and repression at home.”
Of course, this package is just the latest round in what has turned out to be the most restrictive U.S. sanctions regime against a major power since World War II. So many restrictions have been placed on the Russian economy over the last two years that it’s difficult to keep track of them all.
Washington and its allies in Europe and Asia have walled off $300 billion in Russian foreign reserves, a hefty chunk of cash at a time when the war has reportedly cost Moscow more than $200 billion (and, if U.S. assessments are accurate, $1.3 trillion in lost economic growth through 2026). The European Union, which once relied on Russia for around 40% of its natural gas supplies, has decreased Russian fossil fuel imports from a high of $16 billion per month before the war to about $1 billion a month at the end of last year.
Western technology flows into Russia are curbed, although not eliminated, due to a cornucopia of export bans. According to the Treasury Department, Russia’s global oil exports declined by roughly 40% in the first nine months of last year.
Putin, however, has found a way to adapt to the measures. Russian oil and natural gas exports have been rerouted away from Europe and toward countries in the east that have no compunction with buying up relatively cheap Russian fuels to power their own economic development. China and India have become Putin’s saving grace; while the two countries can’t totally replace the lost market in Europe, they at least give Moscow a stream of revenue that is somewhat dependable (although it should be said that India’s imports of Russian crude have decreased recently as the South Asian giant finds better terms elsewhere).
In general, the Russian economy has weathered the circumstances quite well — or at least better than what many policymakers and economists predicted. The Russian economy is projected to grow by 2.6% this year, thanks in large part to the very war in Ukraine that the U.S. and Europe are trying so hard to end on Kyiv’s terms.
The Biden administration clearly believes this situation isn’t good enough, and, like sanctions advocates the world over, is banking on the idea that an even tighter squeeze on Russia’s finances will, over time, compel Putin to reassess his Ukraine policy. The assumption holds a certain logic: Putin, the logic goes, is just as worried about his country’s bottom line as every other rational world leader on the planet. Therefore, he may be willing to cut his war aims short in order to preserve what’s left of Russia’s long-term financial health.
But if that’s the judgement the administration is making, Biden and his advisers will be disappointed. Putin has demonstrated consistently over the war’s first two years that subjugating Ukraine — or at the very least holding the territory Russia currently possesses and avoiding a full-fledged Ukrainian military victory — is his top foreign policy priority. The only priority more important to him is maintaining his hold over the Russian political system. And at this point, the two may very well be synonymous because a loss in Ukraine could jeopardize, if not significantly threaten, Putin’s hold on power at home.
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In reality, the latest U.S. sanctions against Russia aren’t going to have a major impact on Putin’s decision-making calculus and preferences. They certainly won’t convince him to stop the war or call off any number of Russian military offensives that are currently ongoing along the 600-mile-long front line. Why? Because for Putin’s Russia, taking an economic beating is far preferable and more manageable than taking a military beating in Ukraine — particularly when a Russian defeat will complicate Russia’s geopolitical position, expose Russia as a weak power, and bring Ukraine even closer into Western economic and security institutions.
Ultimately, policy change is what sanctions are all about. Absent that, these latest designations are nothing more than symbolism and public relations.
Daniel DePetris (@DanDePetris) is a contributor to the Washington Examiner’s Beltway Confidential blog. His opinions are his own.