(RightWing.org) – Russia has been increasingly aggressive over the last several days in Ukraine. As a result, the Biden Administration and much of the European Union (EU) have hit the country and its President, Vladimir Putin, with severe sanctions. However, a recent report reveals these actions may not be much of a deterrent, and worse, may even embolden the Kremlin.
Financial Sanctions
The first sanctions to hit Russia, its parliament, and Putin were financial and involved two of the country’s largest banks: VEB and the military PSB. Following the increased activity, sanctions involved tech exports and more banks, which according to the US Treasury Department, involved 80% of the country’s banking assets. Then came one of the hardest hits – removing the country’s banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system and sanctioning the Russian Central Bank. As a result, the ruble, Russia’s currency, tanked.
Nord Stream 2 Pipeline
In an effort to dole out a bigger hit, both the Biden Administration and Germany sanctioned Nord Stream 2 AG, a Swiss company responsible for the pipeline’s construction and operation. But, here’s the thing about the pipeline. It’s not yet operational, so what the sanctions do is hurt future gas transport, not what Russia is currently trading. And, what they’re currently trading is enough to keep bankrolling the country and funding its military operations.
Biden left the energy sector virtually untouched to help spare Americans higher prices at the gas pump. But, according to Adam Tooze, a finance expert and historian at Columbia University, what he’s really doing is sending a message that there are exceptions, therein telling Putin that perhaps the US isn’t all-in on the Ukrainian efforts. It certainly gives him an area to exploit.
If Biden truly wants to have an effect, suggests Senator Pat Toomey (R-PA), he should “impose crippling sanctions on Russia’s oil and gas sector.” That, the Senator says, will isolate Russia’s financial system and halt its international activity, which is currently still operating.
A Catch-22
If the Biden Administration should sanction the gas and oil sector, it creates another problem, proving just how delicate the situation truly is. Currently, Russia exports to Europe, providing one-third of its fossil fuel needs. If Biden sanctions that and disrupts the supply to European nations, he runs the risk of severing the ties he’s built up in the last few days. Alienating these countries at a time when he needs them most in order to stand up to Putin would be the death knell.
This is one area that requires time and finesse, which given the situation in Ukraine, may not come soon enough.
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