Putin’s billions: have sanctions backfired?

When Vladimir Putin sent his tanks into Ukraine on 24 February, he did so under the assumption that the West was too ruptured and disjointed to pull together a unified response. It was the first of many miscalculations. That same day, Boris Johnson promised ‘massive’ economic sanctions that would ‘hobble’ Russia’s economy to the point of shutdown. ‘Putin chose this war,’ said Joe Biden that evening, as the United States announced its own sanctions on Russia’s top banks. ‘Now he and his country will bear the consequences.’

The global economic response to Russia’s aggression has been stronger than anyone predicted. Russia’s most notorious oligarchs have had their assets seized and the country’s financial firms have been frozen out of international banking. Of the $600 billion war chest built by Putin – the fourth-highest central bank reserves of any country – more than a third has been frozen by sanctions. Asian democracies joined the economic fight, with Japan ending its historic neutrality. The world’s commercial might was mobilised as never before. But just over 100 days on from all this, it’s fair to ask: are these sanctions working?

Russia is struggling to export goods to Ukraine’s allies. But just as Putin calculated, Europe has found no viable alternative to his energy supplies, so it keeps on buying from the Kremlin. Russia’s finance ministry was expecting an additional $9.6 billion of income in April alone, thanks to energy price spikes. If these prices stay elevated, Putin is on track to make more money from oil and gas this year than last. At the moment, he’s raking in roughly $800 million per day – and spending much of it in Russia in order to stimulate the economy. If the aim of sanctions was to starve the Russian economy – and war machine – then it’s hard to call them a success.