Russia’s invasion of Ukraine marked the beginning of some of the biggest economic sanctions seen in recent times. Countries like the U.S, France, the U.K, and Canada have removed the ability for Russian banks to procure payments across nation lines. The US in particular has begun particularly drastic measures, stopping the export of important technology to Russia while also refusing all imports of Russian oil and gas. Let’s learn more about Russian financial sanctions below.

Companies in the U.S such as Mastercard, Visa, and Apple have also stopped any payments coming in and out of Russia. Other companies outright removing their services in Russia. Meanwhile countries such as England are looking to follow in the US’s footsteps as the year passes, pledging to stop any oil imports before the year ends. 

The Russian Economic Impact

All of this together is projected to contract Russia’s economy by up to 15% in 2022. This is a sizable dip to any economy and when it comes to showing Russia that the war on Ukraine is disapproved of, this is the strongest non-combat based option. This is not the most extreme sanctioning available, trade in some markets still existing with Russia, but a dent is being made. There are notable side-effects to this strategy though, same as any, and these affect both the common people of and those sanctioning Russia.

Sanctions tend to affect the most vulnerable and common people of a country more than its government at large, an unfortunate necessity when it comes to implementing sanctions aggressively enough to spur change. This means interest rates have risen 10.5% in Russia, and the value of currency, the ruble, has been fluctuating by up to 30%. Citizens of Russia have rushed to buy precious metals such as gold and palladium due to these market changes. The value of these metals increasing four times over. The Russian government has moved to stabilize its economy but with clear potential consequence to its citizens.

Outside of Russia there are also massive economic effects that come with isolating a nation as powerful as it. Most notably Russia is the second largest producer of crude oil globally. The sanctions on oil have led to the highest recorded gas prices in the US at $4.42 per gallon on May 12, 2022. Beyond this the stock market in the U.S has also reached some of the lowest lows since 1970 and cryptocurrency has been in a notably volatile state. The market seems to be veering towards low investment and high volatility, a negative economic state for any nation.

In Conclusion

These are some of the serious consequences to sanctioning Russia in a meaningful capacity. Although these consequences are necessary evils to an effective sanction. If the U.S and other western countries want to stop or slow the invasion on Ukraine, sanctioning is a necessary step. Still, it’s important to recognize the effects on day to day citizens and markets. There’s give and take to any international policy, and things like the rising gas prices are one of the things that have to be given.

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