Will new US sanctions affect Russia’s military goals? Analysis

According to analysts at The New York Times (NYT), the new US sanctions targeting Russia’s oil industry are unlikely to change the Russian president’s military objectives, though they will add further strain to the country’s economy.

As The New York Times reports, Russian companies have long been preparing for the possibility of tougher sanctions, said Tatiana Stanovaya, founder of the political analysis firm R.Politik.

In her view, Putin remains willing to bear enormous losses to achieve his goals. Moreover, Trump may once again change his position on the issue.

The publication notes that revenues from oil and gas sales account for about a quarter of Russia’s budget. In addition, Russia’s oil industry has been suffering from Ukrainian strikes. Despite this, some Russian experts believe that the new US sanctions will not have a significant impact.

Analysts also point out that Russia has learned to skilfully evade restrictions by using a fleet of hundreds of old ships not insured by Western companies and by conducting transactions through intermediary firms in third countries.

And since Russia accounts for around nine per cent of global oil sales, any restrictions on its exports will reduce supply and drive prices higher — creating even more incentive to circumvent sanctions.

Echoing this perspective, The Guardian reports that the new U.S. sanctions targeting Russia’s oil and gas sector, along with the 19th package of EU sanctions, will not significantly affect Russia and will not serve as the “shock that would be needed to fundamentally change the trajectory of the war.”

According to the publication, the newly announced measures “come after years and years of sanctions to which Russia has adjusted.”

The newspaper cautions that it is unrealistic to expect an end to hostilities as a result of additional sanctions “unless they are combined with a more open negotiating position from the west.” Such an approach, in turn, could lead to a deal “somewhat more favourable to Russia than the west would prefer.” For instance, if Russia were to stop at the borders of Donbas, it would be “ an unfair outcome for Ukraine and frustrating for its backers – but still better than many alternatives,” the article notes.

On 23 October, the EU adopted its 19th package of sanctions against Russia, aimed at curbing the country’s revenues from the energy sector, strengthening financial restrictions, and tightening control over sanctions evasion through third countries.

A day earlier, on 22 October, the U.S. Department of the Treasury announced new sanctions against Russia, including restrictions on the oil companies LUKOIL and Rosneft.

By Vugar Khalilov