by Mitch Kokai
Senior Political Analyst, John Locke Foundation
As Russia continues its invasion of Ukraine, the United States and western allies have imposed a new round of economic sanctions. But these won’t achieve the desired effect as long as there is a carve-out for Russia’s energy sector.
Last week, the United States imposed sanctions on four large Russian banks and restricted certain Russian state-owned enterprises from raising money in international markets. On Monday, the U.S., the European Union, and the United Kingdom took an extraordinary step to sanction Russia’s central bank, the Bank of Russia, preventing it from moving assets it held abroad to stabilize Russia’s economy, or “using other government and private banks to manage central bank operations.” Additionally, the U.S. Department of Treasury prohibited Americans from doing business with Russia’s central bank, finance ministry, and Russia’s sovereign wealth fund. No country’s central bank had ever been sanctioned like this before. According to officials from the Biden administration, these latest sanctions targeting Russia’s banking and financial systems represent the West’s “biggest sanctions campaigns in the past half-century.”
Consequently, the Russian ruble tumbled more than 20 percent. …
… President Biden defended the carve-out of Russian energy from sanctions as necessary “to limit the pain the American people are feeling at the gas pump.” Under his watch, gas prices have skyrocketed 60 percent, and the United States has doubled the amount of crude oil imports from Russia last year.
Although imports from Russia account for only 3 percent of overall U.S. crude oil imports in 2021, the United States is on track to become more dependent on Russia’s oil as President Biden doubles down on his war on the U.S. energy industry to advance “green energy.” …
… Ironically, the United States and European Union’s war on fossil fuel in their own backyard has forced them to rely on energy supplies from an adversary.