Russia Gets Sanctioned…Excluding Oil & Gas

In response to Russia’s invasion of Ukraine The U.S. and European allies have laid down the law, and are now kissing most Russian Banks goodbye from the global financial payment system, Swift.

Swift essentially serves as an arterial pathway for money transfers across the world. The payment system is comprised of “11,000 banks and institutions in more than 200 countries.” Swift is more or less akin to AOL Instant Messenger, just in a banking facet. I wonder what Putin’s screen name is.

Although Russia is facing a litany of sanctions and major banks are feeling the pressure, their energy sector remains relatively unscathed. Russia provides ~40% of Europe’s natural gas imports. So sanctioning this sector would probably have nuclear (pun intended) consequences for Europe. Russia’s entire oil and gas sector provides half of their foreign sales. Unfortunately Europe is very much so reliant on Russia’s oil & gas exports.

Putin likely knew that Europe would not be capable of managing already tight economic conditions if sanctions were instituted against Russia’s oil & gas exports. I guess that whole COP26 meeting was for nothing…Great job everyone.

While Russia will obviously feel pain from major bank ejections from Swift, it’s likely they’re not totally reeling as a result. Although, the Russian Ruble did absolutely puke as a result of sanctions being announced.

Justine Walker, head of sanctions and risk at the Associate of Certified Anti-Money Laundering Specialists stated the elephant in the room, “You can’t get away from the fact that Europe still has a dependency on Russia.” And at a moment when inflationary pressures are running rampant worldwide, and oil prices going absolutely brazy, sanctioning Russian oil & gas exports was absolutely off the table. If this isn’t addressed at the next global climate summit I will delete my account.