West's sanctions on Russia: Symbolism over substance

 EU IMPORTS FROM RUSSIA INCREASED IN 2022

WIDE RANGE OF IMPORTS, NOT JUST ENERGY

There are several reports now indicating that the sanctions against Russia are in fact having very little effect in damaging the economy of Russia. It seems that the reality is that sanctions are damaging the economies of those who have imposed sanctions more than the damage to Russia. Exports from the EU into Russia were down 37% while imports from Russia into the EU were up 69.9%. Below is graph of imports and exports between EU countries and Russia.

It was also reported this week by the U.S. treasury department that sanctions on oil will not apply to products from Russia that are refined by third party countries. So any crude oil that is piped or transferred to China, India or other countries and then refined into diesel, heating oil or gasoline are exempt from sanctions. It is clear that sanctions are not damaging Russia's ability to make money. It is also clear that many countries are in fact being damaged by their inability to sell products and services to Russia. It appears all the companies that have lost billions on their exit from Russia will never be able to recoup their losses and will not likely ever be going back to those markets. Those voids have been filled by other countries and companies and domestic business.

The point is that sanctions have mostly been ineffective in changing political outcomes. Dialogue and diplomacy has always been more effective in the long run. We have seen sanctions imposed on North Korea and Iran that have been in place for over 40 years with little effect. While sanctions have hurt many of the small countries with limited export capacity, it is very difficult for such measures to have lasting effects on large countries with resources on which that others are dependent.

While at this point it is unlikely that this scene will ever be reversed, it should be noted for future reference that sanctions can be damaging to all involved and should be calculated carefully.