Putin Smiles Amid High Oil Prices... Western Sanctions on Russia Backfire Instead

Russia, Rising Oil Export Revenue Due to High Prices... Fueling Energy and Food Crises

Russian President Vladimir Putin is making a toast via video at the opening ceremony of the 14th BRICS (Brazil, Russia, India, China, South Africa) National Business Forum in Moscow on the 23rd (local time).
[Provided by the Kremlin]
[Image source=Yonhap News]

[Asia Economy Reporter Yoon Seul-gi] As the war caused by Russia's invasion of Ukraine has been ongoing for more than four months, an analysis has emerged that Western sanctions against Russia, which were expected to deal a heavy blow, are unfolding in the exact opposite manner.

Recently, The New York Times (NYT) reported, "While Russia has successfully withstood strong economic sanctions such as being cut off from the international financial payment system, Western countries are facing the worst inflation and risks of economic recession." After the sanctions, the West has faced difficulties such as soaring energy prices and inflation, but the damage to Russia has been minimal.

On the contrary, Russia has retaliated following Western economic sanctions, exacerbating the energy and food crises. Russia has drastically reduced natural gas supplies to Europe and bombed Ukrainian grain export routes.

The media pointed out that considering the surge in international oil prices leading to Russia's oil export revenue reaching an all-time high, and the ruble, which once plummeted, recovering to its highest level in seven years, the Western strategy to cut off Russia's financial lifeline has lost its footing.

The situation in Ukraine is also unfavorable. As Russian forces concentrate firepower in the Donbas region, the Ukrainian military has suffered heavy losses, with about 200 casualties per day. The media forecasted that with the current favorable situation for Russian forces, President Putin is unlikely to easily engage in peace negotiations with Ukraine.

In this regard, experts pointed out that the West did not consider the peculiarities of the Russian economy. Elina Ribakova of the Institute of International Finance (IIF) recently posted on social media, "The Russian financial system, after experiencing severe deposit withdrawals for several weeks, is operating as usual," and criticized, "The idea that cutting off Russia's financial lifeline for just a few weeks would end the war was naive."