One Year Later: Why Sanctions Against Russia ‘Failed Completely’

Russia became the most sanctioned nation in the world in 2022, as it was targeted in an unprecedented NATO campaign.

Nearly one year later, not only has the Russian economy not been “devastated,” but it’s actually expected to see more growth than Germany and Britain in 2023...

It has been nearly one year since Russia became the most sanctioned nation in the world, and not only have the predictions from the Western politicians implementing those measures not become a reality—but now even the establishment media outlets that were once cheering for the complete isolation of Russia are now starting to admit that the ultimate global pressure campaign has failed. 

And just a quick note here… I’m an American journalist, currently based in Moscow, and working for RT International. For the last eight months, I have seen headline after headline claiming that the Russian economy is on the verge of crumbling altogether, and I have yet to see any evidence of that here on the ground.

In fact, not only have I not seen any shortages of food and supplies, or skyrocketing prices, but the initial effects from the onslaught of sanctions were quickly overcome, with existing businesses adapting to the changes and new Russian businesses replacing the old Western versions that decided to leave the country. 

So, it comes as no surprise that the media is finally catching up to the reality of the situation… with the New York Times admitting, “The West Tried to Isolate Russia. It Didn’t Work.” And the Associated Press acknowledging there has been “No economic ‘knockout’ yet from West’s sanctions on Russia.” As for the sanctions targeting Russia’s lucrative energy sector, an analyst quoted by CNBC described the fallout by saying “Sanctions on Russian crude oil have ‘failed completely.’”

Therefore, it seems only right to take a look back at what Western officials like U.S. Treasury Secretary Janet Yellen had to say nearly one year ago, in March 2022:

“It’s important to understand that we have already had a very devastating impact on Russia. We have isolated Russia financially. The Ruble has been in a freefall. The Russian stock market is closed. Russia has been effectively shut out of the international financial system … The Russian economy will be devastated as a consequence of what we’ve already done, but we do continue to consider further steps we can take,” Yellen said.

The only problem? Well, despite all of the sanctions imposed on Russia, the immediate effects of the “maximum pressure campaign” from the West didn’t last long…

For example, the Ruble went on to hit a seven-year high in June—with reports noting that one of the biggest impacts on the Russian currency was the soaring energy prices that were sent skyrocketing even more over the uncertainty of whether supplies from Russia would be allowed to continue flowing into the countries that relied on it the most. 

Russia is the world’s largest exporter of gas and the second-largest exporter of oil. So, when energy prices are up, so are profits.

And up until last year, the European Union benefitted from Russia’s natural resources, with 41% of its natural gas imports and 36% of its oil imports coming from Russia in 2020.

One would think that if the EU was planning to cut off their reliance on Russian resources, then they would have a plan in place to make sure that their citizens didn’t have to pay the price—both literally and figuratively. And to be sure, they were planning, as European Commission President Ursula Von der Leyen recently admitted.

“The cabinet and the commission started to work with the White House and the department already in December on potential sanctions, in case Russia invaded Ukraine. Indeed, we all hoped that it would never happen and we would never have to use these sanctions,” Von der Leyen said during the Munich Security Council.

But despite all of that planning, the people of Europe have been the ones who have suffered because of the political decisions made by their leaders… who seem to be in a competition for the most tone-deaf response. This one from European Commission Vice President Margrethe Vestager is one to remember, as she told the public in March 2022, “Control your own and your teenager's showers. And when you turn off that water, you say: 'Take that, Putin!'"

It’s the obsession that European politicians have with blaming Russia, that was referenced by Russian President Putin this week, when he noted that the EU is forcing its own citizens to suffer, while trying and failing to inflict pain on Russia…

“Those behind the sanctions have shot themselves in the foot by provoking price spikes, rising unemployment, enterprises going out of business, and an energy crisis. And they tell their citizens it’s all Russia’s fault,” Putin said during his State of the Nation address. 

Granted, you wouldn’t know that if you were only listening to U.S. officials like Joe Biden and Janet Yellen who continue to try to paint the picture of a “struggling” Russian economy. 

But contrary to their claims, Russia is not struggling. And even with all of the sanctions imposed in the last year, the Russian economy is still expected to grow in 2023. And it’s actually expected to grow more than Germany, while the British economy isn’t expected to grow at all. So, how is that possible?

Well, while the West has spent the last year trying to isolate Russia—the rest of the world, from countries across Africa, Asia and the Middle East, have done the opposite, and have actually strengthened their ties with Russia.

Take China, for example… Beijing’s energy imports from Russia, including coal, oil, and natural gas soared from $35 BILLION in 2021 to $60 BILLION in 2022. 

The plan is to increase those numbers even more, as Moscow and Beijing agreed on the construction of a Power of Siberia 2 Pipeline, which is expected to be operational by 2030.

A reminder that Russia is moving on, and finding a replacement for the supplies that could have been designated for the Nord Stream 2 pipeline… if Germany had ever allowed it to become operational, and if it hadn’t been attacked, with a bombshell investigative report suggesting fellow NATO allies are to blame.

So, all in all, trade between Russia and China hit a new record high in 2022, reaching $190 BILLION—up more than 34% from the previous year.

It was also China that was actually praised by some back in August for “throwing Europe an energy lifeline,” due to the fact that it was reselling LNG supplies to the EU. And where was it getting that surplus to resale in the first place? From Russia. 

Of course, the prices Europe was paying for the supplies were significantly higher when it came from China, whether than when it came straight from Russia to begin with, but that didn’t seem to matter, because part of the price they were paying was being able to claim that they no longer relied as heavily on Russian LNG.

Oh, and China isn’t the only one that is playing a role in keeping the West supplied during this trying time that they created for themselves… India has also ramped up its imports of Russian crude oil and is refining it into fuel that is then sent to Europe and the U.S.

A recent report from Bloomberg noted that U.S. officials are well aware that Indian and Chinese refiners are profiting off of buying discounted Russian crude and exporting products at market prices—noting that “they’re fine with that.”

So, what they’re really saying that they don’t have a problem continuing to rely on Russian oil and gas… just as long as they can claim that they are depriving Russia of profits from its resources. But in reality, the only thing the West is doing right now is paying more for the same supplies themselves, in order to have some illusion of control that is only hurting their own people at the end of the day. Make it make sense.

It's also another reminder that Janet Yellen’s claims that the West had “isolated Russia financially” and shut Russia out of the international financial system simply aren’t true. 

So, has Yellen changed her tune since then? Well, the short answer is No. But she is admitting that even in the face of threats from the US, plenty of countries are still openly trading and working with Russia – and there’s not much the US can do about it.

“We have made clear that providing material support to Russia or assistance with any time of sanctions of evasion would be a very serious concern to us. And we will certainly continue to make clear to the Chinese Government and to companies and banks in their jurisdiction about what the rules are regarding our sanctions and the serious consequences they would face for violating them,” Yellen said.

As for the politicians in Europe, have they finally learned their lesson? 

*Checks notes to see that Von der Leyen announced a 10th package of EU sanctions against Russia on February 15, 2023*

That would be a NO… as it appears they still think that can sanction Russia into submission. But even as the West kicks off Year Two by issuing warnings to countries that continue to work with Russia—thus rendering the historic sanctions campaign ineffective—it’s important to remember that those threats are a major reason why the rest of the world didn’t go along with the Western campaign to isolate Russia in the first place… and that’s something everyone should be talking about.