Russia is winning the economic war - and Putin is no closer to withdrawing troops
It is now three months since the west launched its economic war against Russia, and it is not going according to plan. On the contrary, things are going very badly indeed.
Sanctions were imposed on Vladimir Putin not because they were considered the best option, but because they were better than the other two available courses of action: doing nothing or getting involved militarily.
The first set of economic measures were introduced immediately after the invasion, when it was assumed Ukraine would capitulate within days. That didn’t happen, with the result that sanctions – while still incomplete – have gradually been intensified.
There is, though, no immediate sign of Russia pulling out of Ukraine and that’s hardly surprising, because the sanctions have had the perverse effect of driving up the cost of Russia’s oil and gas exports, massively boosting its trade balance and financing its war effort. In the first four months of 2022, Putin could boast a current account surplus of $96bn (£76bn) – more than treble the figure for the same period of 2021.
When the EU announced its partial ban on Russian oil exports earlier this week, the cost of crude oil on the global markets rose, providing the Kremlin with another financial windfall. Russia is finding no difficulty finding alternative markets for its energy, with exports of oil and gas to China in April up more than 50% year on year.
That’s not to say the sanctions are pain-free for Russia. The International Monetary Fund estimates the economy will shrink by 8.5% this year as imports from the west collapse. Russia has stockpiles of goods essential to keep its economy going, but over time they will be used up.
But Europe is only gradually weaning itself off its dependency on
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