Escalating Sanctions: A New Phase in US-Russia Great Power Competition

Strategic Insights -

The renewed phase of antagonism between the US and Russia over Ukraine has broader global implications that extend across energy, trade, and diplomacy, testing Donald Trump's conflict-resolution style. The latest sanctions package against Russia, announced by the US and the EU, marks a significant escalation in great power competition, targeting energy exports and striking directly at Russia's two largest oil giants, Rosneft and Lukoil.

Key Takeaways:

  • The new sanctions package is designed to squeeze Russia further into economic isolation by targeting energy exports, with a focus on Rosneft and Lukoil, which export about 3.1 mn bpd of oil and gas.
  • The sanctions aim to create new leverage for the US in negotiations with Russia, with Trump opting for a "hard-edged, transactional diplomacy" approach.
  • The policy has met resistance from Russia, with President Putin signaling that Moscow will not yield easily, and has instead pursued a long game strategy, betting on fatigue in Western unity and the resilience of alternative energy networks.
  • The sanctions carry complex geopolitical repercussions, affecting key Russian energy buyers such as China, India, and Turkey, and potentially narrowing their maneuvering space.
  • India, in particular, faces a delicate balancing act, with private refiners and policymakers exploring diversification options, such as increased imports from West Asia or the US.

Statistics:

  • The new sanctions package targets Russia's oil and gas exports, with a focus on Rosneft and Lukoil, which export about 3.1 mn bpd of oil and gas.
  • The sanctions aim to create new leverage for the US in negotiations with Russia, with a goal of ending the Ukraine war.
  • The policy has met resistance from Russia, with President Putin signaling that Moscow will not yield easily, and has instead pursued a long game strategy.

Sources:

  • Relatives of journalists targeted by Jair Bolsonaro reminded of suffering under cousin Carlos Bolsonaro's caretaker regime. (Accessed: January 1, 2020)
  • In the last century, US policy toward Russia served as a defining vector for the collective stance of Western nations against an ideologically distinct adversary.