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Eshita Soni

Russia Faces Devastating Economic Sanctions; Will They Recover From This Disastrous Economic State?

Russia. Whenever we hear that country’s name, we instantly think of the current ongoing war between them and Ukraine. Putin’s war has already led to 33,000 deaths and this is increasing at an exponential rate. Most of the countries in the world have stood with the Ukrainians to put an end to this deadly war, and as a result of this Russia is having to face detrimental economic sanctions. Therefore, in this essay I will discuss the most likely implications of the economic sanctions imposed on Russia.

Halting Energy Imports

Before the war Russia, $330 billion came into Russia’s economy from exports. However just after the war started it was quick to see that Russia’s net exports fell by 50%. Earlier this year, when Russia invaded Ukraine the economic situation surrounding energy prices significantly worsened. Before the invasion, Russia was the 2nd largest natural gas and oil exporter in the world, thus, many countries especially in Europe were heavily reliant on Russia’s resources with Russia providing 17% of oil and 47% of gas. Despite this for the UK however, 45% of the UK’s gas came from the North Sea while Russia contributed less than 5%. Within hours of the initial invasion, oil prices surged over $100 a barrel while gas prices shot over 30% across Europe. The surge in gas prices has had major effects on UK’s economy, especially with inflation which is currently at 11.1%. In order to stand against Putin and weaken Russia’s economy over 30 countries (United States, Australia, Canada, France, Germany, Italy, Japan, South Korea, Singapore, Switzerland and the United Kingdom) imposed economic sanctions on Russia.


As most of Russia’s economic growth is dependent on these exports it has a significant negative impact on their economy. As a consequence of the war, many countries have stopped doing business with Russia. Therefore in the short term, although Russia may not see the impact of this, in the long run, Russia will face major economic consequences in the future. As a result of countries stopping imports from Russia, this is allowing countries to find new resources of their own which are making them less reliant. In addition, it is encouraging countries to use renewable energy as nations are realising that firstly relying on other countries is unsustainable and the fact that we are relying on other countries for non-renewable energy sources is unsustainable in itself since they are running out.


However, in response to the fact that many countries have stopped importing oil from Russia, Russia has decreased its oil prices to encourage people to buy from them. As a result, China and India have not chosen a side to either of these countries in the war, Russia is importing their oil at a reduced price which is making it a better value for money. Therefore, in these countries, the demand is increasing as they have been supplied with it from Russia however other countries are facing shortages of oil and have to pay a higher price for it as there is less supply of it.


Threats to Financial Sectors

Japan, the US and other countries quickly imposed sanctions on Russia’s financial sectors including export controls on key inputs like semiconductors. Semiconductors are an essential component of electronic devices, enabling advances in communications, computing, healthcare, military systems, transportation, clean energy, and countless other applications. In addition, Tokyo restricted transactions with the Russian Central Bank and joined the United States, the European Union and others in blocking Russian banks’ access to the global financial messaging system.

Remove all Russian Media

Canadian television removed all Russian channels and Russian broadcasting news. The largest streaming service in the world, Netflix (225 million subscribers) halted all Russian productions. As a response to this Russia removed Netflix from its country. Prior to the war, Russia’s entertainment industry was already low as it accounted for 6.9% of Russia’s economy however after the recent economic sanction of major streaming services this percentage is decreasing.

Banning Flights

Another major economic sanction that has been imposed on Russia is the banning of flights. Over 40 countries have banned Russian aircraft from their airspace. They can land in, take off or overfly the territory of the EU. As a result, this creates major inconvenience to the Russian people as it makes it hard to travel to different countries due to the travel restrictions of Russian aircraft of different countries. Therefore so far as examined money has stopped flowing into the economy from imports, entertainment and flights.

To conclude, because of the war Russia has been facing major economic sanctions which will have many consequences in the future. It may take more than decades for Russia to recover from the economic damage the war has done to their country. Stopping energy imports, and threats to financial sectors, media and flights are just some of the many economic sanctions they are facing. Despite the devastating sanctions that have been placed on Russia as they have been posing an ongoing threat to peace and security in the world it still remains uncertain when the war will end and for Russia to recover from its disastrous economic state it may take more than a lifetime.








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