Why the Toughest Sanctions on Russia Are the Hardest for Europe to Wield
Moscow relies on the money it makes by selling oil and gas, but that energy fuels Europe’s economy and heats its homes.
The punishing sanctions that the United States and European Union have so far announced against Russia for its invasion of Ukraine include shutting the government and banks out of global financial markets, restricting technology exports and freezing assets of influential Russians. Noticeably missing from that list is a reprisal that might cause Russia the most pain: choking off the export of Russian fuel.
The omission is not surprising. In recent years, the European Union has received nearly 40 percent of its gas and more than a quarter of its oil from Russia.
That energy heats Europe’s homes, powers its factories and fuels its vehicles, while pumping enormous sums of money into the Russian economy.
Losing out on those revenues would be hard for Russia, which relies heavily on energy exports to finance its government operations and support its economy. Oil and gas exports provide more than
a third of the national budget. But a cutoff would hurt Europe as well.
“You want the sanctions to hurt the perpetrator more than the victim,” said David L. Goldwyn, who served as a State Department special envoy on energy in the Obama administration.
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Now, the European Union is Russia’s largest trading partner, accounting for
37 percent of its global trade in 2020. About
70 percent of Russian gas exports and half of its oil exports go to Europe.
The flip side of mutual interest is mutual pain.
European leaders are caught between wanting to punish Russia for its aggression and to protect their own economies.
So far, Germany’s decision on Tuesday to
halt Nord Stream 2 — the completed gas pipeline that directly links Russia and northeastern Germany — is among the most consequential that Europe has taken, said
Mathieu Savary, chief European investment strategist at
BCA Research.
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...**becoming ill**
