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    Will Biden’s Sanctions Halt a Russian Invasion of Ukraine?

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    President Vladimir V. Putin has learned from earlier U.S.-led sanctions, and his allies could benefit from a more isolated Russia.WASHINGTON — When the Obama administration imposed sanctions on Russia for invading Ukraine in 2014, American officials were hopeful they would deter President Vladimir V. Putin from further aggression.Some of the officials argue today that the sanctions prevented Mr. Putin from ordering Russian forces beyond where they had halted on the Crimean Peninsula and in the eastern Donbas region. But Mr. Putin held on to Crimea. And on Monday, he ordered more troops into an insurgent-controlled area of eastern Ukraine where thousands of Russian soldiers have been operating and said the Kremlin was recognizing two enclaves as independent states.Now, President Biden, who as vice president helped oversee Ukraine policy in 2014, has to weigh what sanctions might compel Mr. Putin to halt his new offensive, which the White House has judged to be an “invasion.” The White House is taking a step-by-step approach, trying to calibrate each tranche of measures to Mr. Putin’s actions.“I’m going to begin to impose sanctions in response, far beyond the steps we and our allies and partners implemented in 2014,” Mr. Biden said on Tuesday in announcing a new set of sanctions. “And if Russia goes further with this invasion, we stand prepared to go further.”While American officials have studied the effects of sanctions imposed since 2014 and sharpened techniques, Mr. Putin has had years to make his country’s $1.5 trillion economy more insular so that parts of Russia would be shielded from tough penalties. Speaking to reporters on Friday, he boasted that his country had grown more self-sufficient in the face of “illegitimate” Western sanctions, according to Russia’s Tass news service. He added that in the future, it would be “important for us to raise the level of our economic sovereignty.”And perhaps most notably, Mr. Putin and his closest aides and partners in Moscow might not suffer much themselves from sanctions, analysts say.Mr. Putin’s decision on Monday to press ahead with the troop movement suggests that he has concluded that the costs of new sanctions are tolerable, despite U.S. talk of “massive consequences” for his country. Several of his top aides made that point in choreographed speeches to him in a meeting of his Security Council on Monday in Moscow.If Russian officials are firm in that mind-set, the Biden administration might find it has to impose the absolute harshest sanctions — ones that would inflict suffering on many ordinary citizens — or look for a noneconomic option, such as giving greater military aid to an insurgency in Ukraine. Mr. Biden has said he will not send American troops to defend Ukraine.Some of the hard-line nationalist men around Mr. Putin were already on a Treasury Department sanctions list and accept that they and their families will no longer have substantial ties to the United States or Europe for the rest of their lives, said Alexander Gabuev, the chair of the Russia in the Asia-Pacific Program at the Carnegie Moscow Center.“They are the powerful everybodies in today’s Russia,” he said. “There is a lot of posh richness. They’re totally secluded. They’re the kings, and that can be secured in Russia only.”Furthermore, because of their roles in state-owned enterprises and their business ties, they are “the very guys who are directly benefiting from the economy becoming more insulated, more detached from the outside world,” he added.They have also adopted a siege mentality rooted in an ideological belief about the United States and its sanctions policies that Mr. Putin regularly pushes. “He says, ‘It’s not because of actions I take, but it’s because we’re rising as a power, and the Americans want to punish us for standing up to hegemonism,’” Mr. Gabuev said. “I think that’s genuine. The bulk of my contacts in the government believe that.”The sanctions announced by the United States on Tuesday include penalties against three sons of senior officials close to Mr. Putin and two state-owned banks, as well as further restrictions on Russia’s ability to raise revenue by issuing sovereign debt. The costs are not expected to be felt widely in Russia — the two banks are policy institutions and do not have retail operations — but American officials could eventually announce more painful steps.That announcement followed an executive order issued by Mr. Biden on Monday night that prohibits business dealings between Americans and entities in the Russia-backed eastern enclaves in Ukraine. The Biden administration would also have the authority to impose sanctions on anyone operating in those areas, a U.S. official said.Britain announced Tuesday that it was freezing the assets of five Russian banks and imposing sanctions on three Russian billionaires and certain members of Parliament. And Germany said it was halting certification of the Nord Stream 2 natural gas pipeline that would connect to Russia.A severe economic disruption could test Mr. Putin’s control of his country. But many analysts are skeptical that the United States and its European allies will follow through with the toughest options that they have considered.Sputnik, via Associated PressOfficials from the White House, State Department and Treasury Department have spent weeks coordinating a response with European leaders and major financial institutions and say they are able to act almost immediately as Russia escalates its actions.Some experts say that if the Biden administration follows through on the most severe options that officials have suggested are possible — most notably severing the country’s top banks, including Sberbank and VTB, from transactions with non-Russian entities — Russia could suffer a financial panic that triggers a stock market crash and rapid inflation. The effects would most likely strike not only billionaire oligarchs but also middle-class and lower-income families. Russian enterprises would also be unable to receive payment for energy exports.Besides isolating Russian state-owned banks, the escalatory sanctions that U.S. officials have prepared would also cut off the ability to purchase critical technologies from American companies.If the United States imposes the harshest penalties, “there will be unexpected and unpredictable consequences for global markets,” said Maria Snegovaya, a visiting scholar at George Washington University who co-wrote an Atlantic Council paper on U.S. sanctions on Russia.Edward Fishman, a top State Department sanctions official in the Obama administration, called Mr. Biden’s action on Tuesday a modest first step intended as “a shot across the bow.”Mr. Fishman said the administration’s move against one of the two targeted banks — VEB, the country’s main development bank — was the first time the United States had fully cut off a state-owned Russian financial institution. “I interpret that as a warning that the Biden administration is prepared to cut off other major Russian banks from the U.S. financial system,” Mr. Fishman said.“Biden is giving Putin an opportunity to step away from the brink,” he added. “But he’s also signaling that, if Putin unleashes a full-scale war, the economic costs will be immense.”Sberbank is a possible target of U.S. sanctions. Some experts say that if the Biden administration imposes particularly harsh measures, Russia could suffer a financial panic.Evgenia Novozhenina/ReutersA severe economic disruption could test Mr. Putin’s control of his country. But many analysts are skeptical that the United States and its European allies will follow through with the toughest options that they have considered, as they may be discouraged by fears over collateral damage to their own economies.And no Western officials have even proposed choking the lifeblood of Russia’s economy by cutting off its lucrative energy exports. Experts say that a move against Russian energy revenues would have the biggest impact, but that it would also lead to a precarious political situation for Mr. Biden and other world leaders as oil and gas prices rise in a period of high global inflation.The Russian government has spent years trying to reconfigure its budget and finances so that it can withstand further sanctions, efforts that have been aided by high market prices for oil and gas. It has relatively low debt and relies less on loans from foreign entities than it did before 2014. Most importantly, the central bank has accumulated foreign currency reserves of $631 billion, the fourth-largest such reserve in the world.Some important Russian state-owned enterprises and private companies have actually benefited from U.S. sanctions. Kremlin policies aimed at replacing Western imports with Russian and non-Western products wind up raising the profits of those businesses. And some of Mr. Putin’s allies and their families have done well under the initiatives. One example is Dmitry Patrushev, the minister of agriculture, whose family has become wealthier from new agriculture industry policies, Mr. Gabuev said.President Xi Jinping of China, who has been strengthening his nation’s ties with Russia, could help Mr. Putin get around some of the sanctions or bolster Russia’s economy with greater energy purchases. When the two leaders met in Beijing at the start of the Winter Olympics, their governments announced a 30-year contract in which China would purchase gas through a new pipeline running across Siberia. Chinese companies might also be able to fill some of the supply chain gaps created by a stoppage in certain U.S. technology exports to Russia, though those companies are unable to replicate more advanced American products.Chinese leaders would probably be careful about having its large state-owned banks continue to do business overtly with any Russian banks that are under U.S. sanctions, but China has ways to keep some transactions hidden.“They’ve developed a lot of e-payment and digital workarounds,” said Daniel Russel, a former assistant secretary of state for East Asian and Pacific affairs and an executive at the Asia Society. “There are all kinds of fairly sophisticated barter systems they’ve been employing. Thirdly, they can hide behind a lot of black market stuff.” More

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    Russia’s Moves in Ukraine Unsettle Energy Companies and Prices

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    Oil and gas prices are up, and Western energy giants with operations and investments in Russia could find it harder to keep doing business there.Russia’s recognition of two breakaway regions in eastern Ukraine could threaten important investments of Western oil giants and further drive up global energy prices in the next few weeks.Since the closing days of the Cold War, Russia’s energy-based economy has become entwined with Europe’s. European energy companies like BP, TotalEnergies and Shell have major operations and investments in Russia. Though expansion of those holdings was largely halted after Russia’s 2014 annexation of Crimea, they remain important profit centers and could now be at risk.Seeking to isolate President Vladimir V. Putin of Russia, President Biden and the European Union imposed new sanctions on the Russian government and the country’s political and business elite on Tuesday. The measures do not directly target the energy industry. That’s why oil and gas prices settled only modestly higher on Tuesday afternoon in New York.But analysts said the energy industry could still be hurt if the crisis dragged on, particularly if Mr. Putin decided to send troops into the rest of Ukraine or sought to take control of the capital, Kyiv. Such aggressive action would most likely force Mr. Biden and other Western leaders to ratchet up their response.European leaders are already taking aim at some Russian energy exports. Chancellor Olaf Scholz said on Tuesday that Germany would halt certification of the Nord Stream 2 pipeline, which is supposed to deliver Russian gas. The decision will not have an immediate impact on European energy supplies because the pipeline is not yet operating. But Russian gas shipments through Ukraine could be halted, especially if Mr. Putin’s troops push farther into Ukraine or if he cuts off gas to Europe in retaliation for Western sanctions.Russia supplies one out of every 10 barrels of oil used around the world. After Western officials said Russian troops had entered eastern Ukrainian regions held by separatists, oil prices quickly jumped early Tuesday to nearly $100 a barrel, their highest level in more than seven years, before moderating.Energy experts say oil prices could easily rise another $20 a barrel if Mr. Putin seeks to occupy more or all of Ukraine. Such an outcome would also cause huge problems for Western oil companies that do business in Russia.“In that environment, the legal and reputational risk faced by Western energy companies operating in Russia will rise sharply,” said Robert McNally, who was an energy adviser to President George W. Bush and is now president of the Rapidan Energy Group, a consulting firm. “For oil markets, this means slower supply growth and even tighter global balances and higher prices in the coming years.”TotalEnergies, which is based near Paris, owns nearly 20 percent of Novatek, Russia’s largest liquefied natural gas company, and Shell has a strategic alliance with Gazprom, Russia’s natural gas monopoly.The Salym oil field, which Shell operates jointly with Gazprom in western Siberia.Alexander Zemlianichenko Jr./BloombergThe Western oil company most involved in Russia is BP, which owns nearly 20 percent of Rosneft, the state-controlled energy company managed by Igor Sechin, who is widely considered a close Putin ally and adviser. BP’s chief executive, Bernard Looney, and its former chief executive Bob Dudley sit on Rosneft’s board with Mr. Sechin and Alexander Novak, Russia’s deputy prime minister.Rosneft contributed $2.4 billion in profits and $600 million in dividends to BP in 2021, and has a secondary listing on the London Stock Exchange. About a third of BP’s oil production, or 1.1 million barrels a day, came from Russia last year.BP executives have so far expressed calm. “We have been there over 30 years and our job is to focus on our business, and that is what we are doing,” Mr. Looney said in a recent conference call with analysts. “If something comes down the road, then obviously we will deal with it as it comes.”Most oil companies have been reporting bumper profits because of rising oil and gas prices. European firms are using some of their profits to invest more in wind, solar, hydrogen and other forms of cleaner energy. But the current crisis could be a major distraction, if not worse.Doing business in Russia has always been complicated, especially as Mr. Putin reasserted state control over energy, squeezing private investors.Shell was forced to give up control of its premier Russian liquefied natural gas project on Sakhalin Island, in eastern Russia, to Gazprom in 2006. Shell retains a modest stake in the facility, and it appears to want to keep the door open to more business in Russia. Along with four other European companies, it helped finance the estimated $11 billion Nord Stream 2 pipeline to Germany.TotalEnergies has continued investing in a $27 billion natural gas complex in the Yamal Peninsula, in the Arctic, that Novatek controls. The project sidestepped earlier Western sanctions by obtaining financing from Chinese banks. It began producing gas for European and Asian customers in 2017.Share prices of BP and Total closed on Tuesday down more than 2 percent, and Shell was down about 1 percent.Prospects for Western oil companies seeking to do business in Russia were once far brighter. Exxon Mobil, Italy’s ENI and other foreign oil companies teamed up with Rosneft in 2012 and 2013 to explore Arctic oil and gas fields.BP owns nearly 20 percent of Rosneft, which operates this refinery in Novokuibyshevsk, Russia.Andrey Rudakov/BloombergBut U.S. and European Union sanctions imposed after Russia’s seizure of Crimea forced many Western companies to stop expanding in Russia in part by limiting access to financing and technology for deepwater exploration.Exxon formally abandoned exploration ventures with Rosneft in 2018, and took a $200 million after-tax loss.Understand How the Ukraine Crisis DevelopedCard 1 of 7How it all began. More

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    What’s at Stake for the Global Economy as Conflict Looms in Ukraine

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    Countries that depend on the region’s rich supply of energy, wheat, nickel and other staples could feel the pain of price spikes.After getting battered by the pandemic, supply chain chokeholds and leaps in prices, the global economy is poised to be sent on yet another unpredictable course by an armed clash on Europe’s border.Even before the Kremlin ordered Russian troops into separatist territories of Ukraine on Monday, the tension had taken a toll. The promise of punishing sanctions in return by President Biden and the potential for Russian retaliation had already pushed down stock returns and driven up gas prices.An outright attack by Russian troops could cause dizzying spikes in energy and food prices, fuel inflation fears and spook investors, a combination that threatens investment and growth in economies around the world.However harsh the effects, the immediate impact will be nowhere near as devastating as the sudden economic shutdowns first caused by the coronavirus in 2020. Russia is a transcontinental behemoth with 146 million people and a huge nuclear arsenal, as well as a key supplier of the oil, gas and raw materials that keep the world’s factories running. But unlike China, which is a manufacturing powerhouse and intimately woven into intricate supply chains, Russia is a minor player in the global economy.Italy, with half the people and fewer natural resources, has an economy that is twice the size. Poland exports more goods to the European Union than Russia.“Russia is incredibly unimportant in the global economy except for oil and gas,” said Jason Furman, a Harvard economist who was an adviser to President Barack Obama. “It’s basically a big gas station.”An underground gas storage facility in Kasimov, east of Moscow. Russia supplies nearly 40 percent of Europe’s natural gas.Andrey Rudakov/BloombergOf course, a closed gas station can be crippling for those who depend on it. The result is that any economic damage will be unevenly spread, intense in some countries and industries and unnoticed in others.Europe gets nearly 40 percent of its natural gas and 25 percent of its oil from Russia, and is likely to be walloped with spikes in heating and gas bills, which are already soaring. Natural gas reserves are at less than a third of capacity, with weeks of cold weather ahead, and European leaders have already accused Russia’s president, Vladimir V. Putin, of reducing supplies to gain a political edge.And then there are food prices, which have climbed to their highest level in more than a decade largely because of the pandemic’s supply chain mess, according to a recent United Nations report. Russia is the world’s largest supplier of wheat, and together with Ukraine, accounts for nearly a quarter of total global exports. For some countries, the dependence is much greater. That flow of grain makes up more than 70 percent of Egypt and Turkey’s total wheat imports.This will put further strain on Turkey, which is already in the middle of an economic crisis and struggling with inflation that is running close to 50 percent, with skyrocketing food, fuel and electricity prices.And as usual, the burden falls heaviest on the most vulnerable. “Poorer people spend a higher share of incomes on food and heating,” said Ian Goldin, a professor of globalization and development at Oxford University.Ukraine, long known as the “breadbasket of Europe,” actually sends more than 40 percent of its wheat and corn exports to the Middle East or Africa, where there are worries that further food shortages and price increases could stoke social unrest.Lebanon, for example, which is experiencing one of the most devastating economic crises in more than a century, gets more than half of its wheat from Ukraine, which is also the world’s largest exporter of seed oils like sunflower and rapeseed.On Monday, the White House responded to Mr. Putin’s decision to recognize the independence of two Russian-backed territories in the country’s east by saying it would begin imposing limited sanctions on the so-called Donetsk and Luhansk People’s Republics. Jen Psaki, the White House press secretary, said Mr. Biden would soon issue an executive order prohibiting investment, trade and financing with people in those regions.Analysts watching the unfolding conflict have mapped out a range of scenarios from mild to severe. The fallout on working-class families and Wall Street traders depends on how an invasion plays out: whether Russian troops stay near the border or attack the Ukrainian capital, Kyiv; whether the fighting lasts for days or months; what kind of Western sanctions are imposed; and whether Mr. Putin responds by withholding critical gas supplies from Europe or launching insidious cyberattacks.“Think about it rolling out in stages,” said Julia Friedlander, director of the economic statecraft initiative at the Atlantic Council. “This is likely to play out as a slow motion drama.”As became clear from the pandemic, minor interruptions in one region can generate major disruptions far away. Isolated shortages and price surges— whether of gas, wheat, aluminum or nickel — can snowball in a world still struggling to recover from the pandemic.“You have to look at the backdrop against which this is coming,” said Gregory Daco, chief economist for EY-Parthenon. “There is high inflation, strained supply chains and uncertainty about what central banks are going to do and how insistent price rises are.”Ukraine’s port of Mykolaiv. The Middle East and Africa are especially reliant on Ukraine’s exports of wheat and corn.  Brendan Hoffman for The New York TimesThe additional stresses may be relatively small in isolation, but they are piling on economies that are still recovering from the economic body blows inflicted by the pandemic.What’s also clear, Mr. Daco added, is that “political uncertainty and volatility weigh on economic activity.”That means an invasion could have a dual effect — slowing economic activity and raising prices.In the United States, the Federal Reserve is already confronting the highest inflation in 40 years, at 7.5 percent in January, and is expected to start raising interest rates next month. Higher energy prices set off by a conflict in Europe may be transitory but they could feed worries about a wage-price spiral.“We could see a new burst of inflation,” said Christopher Miller, a visiting fellow at the American Enterprise Institute and an assistant professor at Tufts University.Also fueling inflation fears are possible shortages of essential metals like palladium, aluminum and nickel, creating another disruption to global supply chains already suffering from the pandemic, trucker blockades in Canada and shortages of semiconductors.The price of palladium, for example, used in automotive exhaust systems, mobile phones and even dental fillings, has soared in recent weeks because of fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, used to make steel and electric car batteries, has also been jumping.It’s too early to gauge the precise impact of an armed conflict, said Lars Stenqvist, the chief technology officer of Volvo, the Swedish truck maker. But he added, “It is a very, very serious thing.”“We have a number of scenarios on the table and we are following the developments of the situation day by day,” Mr. Stenqvist said Monday.The West has taken steps to blunt the impact on Europe if Mr. Putin decides to retaliate. The United States has ramped up delivery of liquefied natural gas and asked other suppliers like Qatar to do the same.A front line position in Luhansk Oblast, in eastern Ukraine, a scene of mortar attacks. “This is likely to play out as a slow motion drama,” said one analyst.Tyler Hicks/The New York TimesThe demand for oil might add momentum to negotiations to revive a deal to curb Iran’s nuclear program. Iran, which is estimated to have as many as 80 million barrels of oil in storage, has been locked out of much of the world’s markets since 2018, when President Donald J. Trump withdrew from the nuclear accord and reimposed sanctions.Some of the sanctions against Russia that the Biden administration is considering, such as cutting off access to the system of international payments known as SWIFT or blocking companies from selling anything to Russia that contains American-made components, would hurt anyone who does business with Russia. But across the board, the United States is much less vulnerable than the European Union, which is Russia’s largest trading partner.Americans, as Mr. Biden has already warned, are likely to see higher gasoline prices. But because the United States is itself a large producer of natural gas, those price increases are not nearly as steep and as broad as elsewhere. And Europe has many more links to Russia and engages in more financial transactions — including paying for the Russian gas.Oil companies like Shell and Total have joint ventures in Russia, while BP boasts that it “is one of the biggest foreign investors in Europe,” with ties to the Russian oil company Rosneft. Airbus, the European aviation giant, gets titanium from Russia. And European banks, particularly those in Germany, France and Italy, have lent billions of dollars to Russian borrowers.“Severe sanctions that hurt Russia painfully and comprehensively have potential to do huge damage to European customers,” said Adam Tooze, director of the European Institute at Columbia University.Depending on what happens, the most significant effects on the global economy may manifest themselves only over the long run.One result would be to push Russia to have closer economic ties to China. The two nations recently negotiated a 30-year contract for Russia to supply gas to China through a new pipeline.“Russia is likely to pivot all energy and commodity exports to China,” said Carl Weinberg, chief economist at High Frequency Economics.The crisis is also contributing to a reassessment of the global economy’s structure and concerns about self-sufficiency. The pandemic has already highlighted the downsides of far-flung supply chains that rely on lean production.Now Europe’s dependence on Russian gas is spurring discussions about expanding energy sources, which could further sideline Russia’s presence in the global economy.“In the longer term, it’s going to push Europe to diversify,” said Jeffrey Schott, a senior fellow working on international trade policy at the Peterson Institute for International Economics. As for Russia, the real cost “would be corrosive over time and really making it much more difficult to do business with Russian entities and deterring investment.” More

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    Why Are Oil Prices So High and Will They Stay That Way?

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    HOUSTON — Oil prices are increasing, again, casting a shadow over the economy, driving up inflation and eroding consumer confidence.Crude prices rose more than 15 percent in January alone, with the global benchmark price crossing $90 a barrel for the first time in more than seven years, as fears of a Russian invasion of Ukraine grew.Though the summer driving season is still months away, the average price for regular gasoline is fast approaching $3.40 a gallon, roughly a dollar higher than it was a year ago, according to AAA.The Biden administration said in November that it would release 50 million barrels of oil from the nation’s strategic reserves to relieve the pressure on consumers, but the move hasn’t made much of a difference.Many energy analysts predict that oil could soon touch $100 a barrel, even as electric cars become more popular and the coronavirus pandemic persists. Exxon Mobil and other oil companies that only a year ago were considered endangered dinosaurs by some Wall Street analysts are thriving, raking in their biggest profits in years.Why are oil prices suddenly so high?The pandemic depressed energy prices in 2020, even sending the U.S. benchmark oil price below zero for the first time ever. But prices have snapped back faster and more than many analysts had expected in large part because supply has not kept up with demand.Oil prices are at their highest point since 2014.Price of a barrel of Brent crude, the global benchmark, and West Texas Intermediate, the U.S. standard

    Source: FactSetBy The New York TimesWestern oil companies, partly under pressure from investors and environmental activists, are drilling fewer wells than they did before the pandemic to restrain the increase in supply. Industry executives say they are trying not to make the same mistake they made in the past when they pumped too much oil when prices were high, leading to a collapse in prices.Elsewhere, in countries like Ecuador, Kazakhstan and Libya, natural disasters and political turbulence have curbed output in recent months.Understand Russia’s Relationship With the WestThe tension between the regions is growing and Russian President Vladimir Putin is increasingly willing to take geopolitical risks and assert his demands.Competing for Influence: For months, the threat of confrontation has been growing in a stretch of Europe from the Baltic Sea to the Black Sea. Threat of Invasion: As the Russian military builds its presence near Ukraine, Western nations are seeking to avert a worsening of the situation.Energy Politics: Europe is a huge customer of Russia’s fossil fuels. The rising tensions in Ukraine are driving fears of a midwinter cutoff.Migrant Crisis: As people gathered on the eastern border of the European Union, Russia’s uneasy alliance with Belarus triggered additional friction.Militarizing Society: With a “youth army” and initiatives promoting patriotism, the Russian government is pushing the idea that a fight might be coming.“Unplanned outages have flipped what was thought to be a pivot towards surplus into a deep production gap,” said Louise Dickson, an oil markets analyst at Rystad Energy, a research and consulting firm.On the demand side, much of the world is learning to cope with the pandemic and people are eager to shop and make other trips. Wary of coming in contact with an infectious virus, many are choosing to drive rather than taking public transportation.But the most immediate and critical factor is geopolitical.A potential Russian invasion of Ukraine has “the oil market on edge,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington. “In a tight market, any significant disruptions could send prices well above $100 per barrel,” Mr. Cahill wrote in a report this week.Russia produces 10 million barrels of oil a day, or roughly one of every 10 barrels used around the world on any given day. Americans would not be directly hurt in a significant way if Russian exports stopped, because the country sends only about 700,000 barrels a day to the United States. That relatively modest amount could easily be replaced with oil from Canada and other countries.A Russian invasion of Ukraine could interrupt oil and gas shipments, which would increase prices further.Brendan Hoffman for The New York TimesBut any interruption of Russian shipments that transit through Ukraine, or the sabotage of other pipelines in northern Europe, would cripple much of the continent and distort the global energy supply chain. That’s because, traders say, the rest of the world does not have the spare capacity to replace Russian oil.Even if Russian oil shipments are not interrupted, the United States and its allies could impose sanctions or export controls on Russian companies, limiting their access to equipment, which could gradually reduce production in that country.In addition, interruptions of Russian natural gas exports to Europe could force some utilities to produce more electricity by burning oil rather than gas. That would raise demand and prices worldwide.What can the United States and its allies do if Russian production is disrupted?The United States, Japan, European countries and even China could release more crude from their strategic reserves. Such moves could help, especially if a crisis is short-lived. But the reserves would not be nearly enough if Russian oil supplies were interrupted for months or years.Western oil companies that have pledged not to produce too much oil would most likely change their approach if Russia was unable or unwilling to supply as much oil as it did. They would have big financial incentives — from a surging oil price — to drill more wells. That said, it would take those businesses months to ramp up production.What is OPEC doing?President Biden has been urging the Organization of the Petroleum Exporting Countries to pump more oil, but several members have been falling short of their monthly production quotas, and some may not have the capacity to quickly increase output. OPEC members and their allies, Russia among them, are meeting on Wednesday, and will probably agree to continue gradually increasing production.In addition, if Russian supplies are suddenly reduced, Washington will most likely put pressure on Saudi Arabia to raise production independently of the cartel. Analysts think that the kingdom has several million barrels of spare capacity that it could tap in a crisis.What impact would higher oil prices have on the U.S. economy?A big jump in oil prices would push gasoline prices even higher, and that would hurt consumers. Working-class and rural Americans would be hurt the most because they tend to drive more. They also drive older, less fuel-efficient vehicles. And energy costs tend to represent a larger percentage of their incomes, so price increases hit them harder than more affluent people or city dwellers who have access to trains and buses.Rising oil and gas prices would pinch consumers, especially the less affluent and rural residents.Jim Lo Scalzo/EPA, via ShutterstockBut the direct economic impact on the nation would be more modest than in previous decades because the United States produces more and imports less oil since drilling in shale fields exploded around 2010 because of hydraulic fracturing. The United States is now a net exporter of fossil fuels, and the economies of several states, particularly Texas and Louisiana, could benefit from higher prices.What would it take for oil prices to fall?Oil prices go up and down in cycles, and there are several reasons prices could fall in the next few months. The pandemic is far from over, and China has shut down several cities to stop the spread of the virus, slowing its economy and demand for energy. Russia and the West could reach an agreement — formal or tacit — that forestalls a full-scale invasion of Ukraine.And the United States and its allies could restore a 2015 nuclear agreement with Iran that former President Donald J. Trump abandoned. Such a deal would allow Iran to sell oil much more easily than now. Analysts think the country could export a million or more barrels daily if the nuclear deal is revived.Ultimately, high prices could depress demand for oil enough that prices begin to come down. One of the main financial incentives for buying electric cars, for example, is that electricity tends to be cheaper per mile than gasoline. Sales of electric cars are growing fast in Europe and China and increasingly also in the United States. More

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    What a Disconnect From Swift Would Mean for Russia

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    A Belgian financial messaging service is once again at the center of an international sanctions fight.WASHINGTON — President Biden has pledged that if Russia invades Ukraine it will face “severe economic consequences,” with the United States likely to unleash a blistering package of sanctions that would effectively cut the Russian economy off from much of the global financial system.The United States has become increasingly reliant on sanctions in the last decade as a way to address diplomatic problems, but directing such tools at an economy the size of Russia’s would come with little precedent. The Biden administration has said that all options remain on the table, suggesting that it could impose an array of sanctions on Russian financial institutions and new restrictions on the exports of American products. But the biggest question among sanctions experts when it comes to inflicting economic pain on Russia is the fate of a critical financial conduit: Swift.In sanctions circles, a move by the United States and its European allies to cut Russia off from Swift has been characterized as a nuclear option. However, doing so is not as simple as it sounds and could yield unintended consequences because of Russia’s size and position in the world economy.“The Russian economy is a different beast,” said Adam M. Smith, who served as a senior sanctions official in the Obama administration’s Treasury Department. “It is twice the size of any economy the U.S. has ever sanctioned.”A Treasury Department spokeswoman said the Biden administration was assessing potential “spillovers” from any sanctions it imposes on Russia and exploring ways to reduce any unintended negative effects. Last week, Biden administration officials met with representatives from U.S. banks to discuss the risks and potential market impacts of sanctions on Russia, including the possible ramifications of cutting off Swift access for entities that had been hit with sanctions.Understand Russia’s Relationship With the WestThe tension between the regions is growing and Russian President Vladimir Putin is increasingly willing to take geopolitical risks and assert his demands.Competing for Influence: For months, the threat of confrontation has been growing in a stretch of Europe from the Baltic Sea to the Black Sea. Threat of Invasion: As the Russian military builds its presence near Ukraine, Western nations are seeking to avert a worsening of the situation.Energy Politics: Europe is a huge customer of Russia’s fossil fuels. The rising tensions in Ukraine are driving fears of a midwinter cutoff.Migrant Crisis: As people gathered on the eastern border of the European Union, Russia’s uneasy alliance with Belarus triggered additional friction.Militarizing Society: With a “youth army” and initiatives promoting patriotism, the Russian government is pushing the idea that a fight might be coming.What is Swift?Officially the Society for Worldwide Interbank Financial Telecommunications, Swift is a Belgian messaging service that connects more than 11,000 financial institutions as they transfer money around the world. It does not actually hold or transfer funds, but allows banks and other financial firms to alert one another of transactions that are about to take place.Swift is a global cooperative of financial institutions that is based in Belgium. It started in 1973 when 239 banks from 15 countries came together to figure out how to best handle cross-border payments.Despite its best efforts to be an apolitical cog in the international financial system, Swift has at times found itself embroiled in diplomatic disputes.Can Russia be booted from Swift?There have been continuing discussions between the United States and its allies in Europe over whether to block Russia’s access to Swift. However, the Biden administration could take that step unilaterally.If the United States decided to levy sanctions on Russian banks, it could then say that Swift was in violation of those sanctions by continuing to let those banks use its system. The Defending Ukraine Sovereignty Act of 2022, which Senate Democrats unveiled this month, would authorize sanctions on providers of specialized financial messaging services, such as Swift, but the Biden administration could also impose such sanctions without the approval of Congress.Cutting a country’s access to Swift is not without precedent.In 2012, Swift expelled as many as 30 Iranian financial institutions, including its central bank, in order to comply with European Union sanctions that were enacted in response to Iran’s disputed nuclear energy program. Services were reconnected after the 2015 nuclear deal, and then cut again in 2018 after the Trump administration withdrew from the pact and resumed sanctions.How would Russia respond to being removed?Russia has faced such threats before. In 2014, when Russia invaded and annexed Crimea, there were calls in Europe to exclude Russia from Swift. Dmitri A. Medvedev, then Russia’s prime minister, said at the time that such a move would be a “declaration of war.” According to the Carnegie Moscow Center, Russian forecasts at the time projected that being cut off from Swift would shrink the country’s gross domestic product by 5 percent.Last week, Nikolay Zhuravlev, the vice speaker of Russia’s Federation Council, told the government-run news agency TASS that removing Russia from Swift would also have economic consequences for European countries, which he said would not be able to receive imports of Russian oil, gas and metals as a result of Russia’s being unable to receive foreign currency.Mr. Smith, the former Treasury official, said the United States and Europe might look for ways to exempt certain Russian sectors, such as energy, from sanctions. However, moves to cut off Russia’s economy could have unintended consequences, such as Moscow retaliating, that could rattle global markets.“They are not without their own cards to play,” he said.A switch to Swift alternativesThe threat of being cut off from Swift might not be as dire as it was in the past.Several countries including Russia have developed their own financial messaging systems that, while less sophisticated than Swift, could allow Russian financial firms to maintain communications with the world. Russia began developing its system in 2014 amid threats of escalating sanctions from the United States.Mr. Medvedev, who is now the deputy chairman of the Security Council of Russia, said last week that the new system was functional and that financial flows would be able to continue within Russia if the country was cut off from Swift. He acknowledged that international financial transfers could be complicated if that happened.“Yes, they will be more difficult, it is obvious, but it won’t be a catastrophe,” Mr. Medvedev said.Some experts on Russia sanctions agree that Western officials are overplaying the potential effects of disconnecting Russia from Swift.“Cutting Russia off from Swift — it won’t be as painful for Russia as Western officials envision,” said Maria Snegovaya, a visiting scholar at George Washington University and a co-author of an Atlantic Council report on U.S. sanctions on Russia.Edward Wong More

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    U.S. Sanctions Aimed at Russia Could Take a Wide Toll

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    The boldest measures that President Biden is threatening to deter an invasion of Ukraine could roil the entire Russian economy — but also those of other nations.WASHINGTON — The most punishing sanctions that U.S. officials have threatened to impose on Russia could cause severe inflation, a stock market crash and other forms of financial panic that would inflict pain on its people — from billionaires to government officials to middle-class families.U.S. officials vow to unleash searing economic measures if Russia invades Ukraine, including sanctions on its largest banks and financial institutions, in ways that would inevitably affect daily life in Russia.But the strategy comes with political and economic risks. No nation has ever tried to enact broad sanctions against such large financial institutions and on an economy the size of Russia’s. And the “swift and severe” response that U.S. officials have promised could roil major economies, particularly those in Europe, and even threaten the stability of the global financial system, analysts say.Some analysts also warn of a potential escalatory spiral. Russia might retaliate against an economic gut punch by cutting off natural gas shipments to Europe or by mounting cyberattacks against American and European infrastructure.The pain caused by the sanctions could foment popular anger against Russia’s president, Vladimir V. Putin. But history shows that the country does not capitulate easily, and resilience is an important part of its national identity. U.S. officials are also sensitive to the notion that they could be viewed as punishing the Russian people — a perception that might fuel anti-Americanism and Mr. Putin’s narrative that his country is being persecuted by the West.From Cuba to North Korea to Iran, U.S. sanctions have a mixed record at best of forcing a change in behavior. And while the Biden administration and its European allies are trying to deter Mr. Putin with tough talk, some experts question whether they would follow through on the most drastic economic measures if Russian troops breached the border and moved toward Kyiv, Ukraine’s capital.President Biden has said he will not send American troops to defend Ukraine. Instead, U.S. officials are trying to devise a sanctions response that would land a damaging blow against Russia while limiting the economic shock waves around the world — including in the United States. Officials say that for now, the Biden administration does not plan to target Russia’s enormous oil and gas export industry; doing so could drive up gasoline prices for Americans already grappling with inflation and create a schism with European allies.But many experts on sanctions believe that the boldest sanctions against Russia’s financial industry, if enacted, could take a meaningful toll.“If the Biden administration follows through on its threat to sanction major Russian banks, that will reverberate across the entire Russian economy,” said Edward Fishman, who served as the top official for Russia and Europe in the State Department’s Office of Economic Sanctions Policy and Implementation during the Obama administration. “It will definitely affect everyday Russians.”Mr. Fishman added: “How are you going to change Putin’s calculus? By creating domestic disturbances. People will be unhappy: ‘Look what you did — all of a sudden my bank account is a fraction of what it was? Thanks, Putin.’”Understand Russia’s Relationship With the WestThe tension between the regions is growing and Russian President Vladimir Putin is increasingly willing to take geopolitical risks and assert his demands.Competing for Influence: For months, the threat of confrontation has been growing in a stretch of Europe from the Baltic Sea to the Black Sea. Threat of Invasion: As the Russian military builds its presence near Ukraine, Western nations are seeking to avert a worsening of the situation.Energy Politics: Europe is a huge customer of Russia’s fossil fuels. The rising tensions in Ukraine are driving fears of a midwinter cutoff.Migrant Crisis: As people gathered on the eastern border of the European Union, Russia’s uneasy alliance with Belarus triggered additional friction.Militarizing Society: With a “youth army” and initiatives promoting patriotism, the Russian government is pushing the idea that a fight might be coming.Sanctions imposed after Mr. Putin annexed Ukraine’s Crimean Peninsula in 2014 and gave military support to an insurgency in the country’s east created a modest drag on Russia’s economy. Those penalties and later ones took a surgical approach, heavily targeting Mr. Putin’s circle of elites as well as officials and institutions involved in aggression against Ukraine, in part to avoid making ordinary Russians suffer.U.S. officials say the impact of sanctions now would be categorically different.Washington is looking to take a sledgehammer to pillars of Russia’s financial system. The new sanctions that American officials are preparing would cut off foreign lending, sales of sovereign bonds, technologies for critical industries and the assets of elite citizens close to Mr. Putin.Previous sanctions heavily targeted Mr. Putin’s circle of elites as well as officials and institutions involved in aggression against Ukraine, in part to avoid making ordinary Russians suffer.Alexander Zemlianichenko/Associated PressBut the real damage to Russia’s $1.5 trillion economy would come from hitting the biggest state banks as well as the government’s Russian Direct Investment Fund, which has prominent Western executives on its advisory board. The Treasury Department would draw from its experience targeting Iranian banks under President Donald J. Trump, though Iran’s banks are much smaller and less integrated into the global economy than Russian banks.Once the department puts the Russian banks on what officials call its “game over” sanctions list, known as the S.D.N. list, foreign entities around the world would stop doing business with the banks, which would have a big effect on Russian companies.The United States would also enact sanctions to cut lending to Russia by foreign creditors by potentially $100 billion or more, according to Anders Aslund, an economist and an author of an Atlantic Council report on U.S. sanctions on Russia. Though Russia has taken steps since 2014 to rely less on foreign debt for expenses, such a loss could still devalue the ruble, shake the stock market and freeze bond trading, Mr. Aslund added.His report estimated that the 2014 sanctions reduced Russia’s annual economic growth by up to 3 percent, and new sanctions could bite much harder.For an average Russian, the harshest U.S. measures could mean higher prices for food and clothing, or, more dramatically, they could cause pensions and savings accounts to be severely devalued by a crash in the ruble or Russian markets.“It would be a disaster, a nightmare for the domestic financial market,” said Sergey Aleksashenko, a former first deputy chairman of the Central Bank of Russia and former chairman of Merrill Lynch Russia. He noted that the ruble had already fallen more than 10 percent from its October value against the dollar, amid increasing talk of Western sanctions.In a sign of the growing seriousness, officials from the National Security Council have been talking with executives from some of Wall Street’s largest banks, including Goldman Sachs, Citigroup, JPMorgan Chase and Bank of America, about the stability of the global financial system in the wake of potential sanctions.The European Central Bank has also warned bank lenders to Russia about risks if the United States imposes sanctions and has asked about the sizes of their loans.For now, though, American officials are not considering any immediate sanctions on the foundation of Russia’s economy: its oil and gas exports.​​European nations rely on natural gas from Russia, and several U.S. allies, notably Germany, prefer that Washington refrain from disrupting the Russian energy industry. Analysts say sanctions that limit Russia’s ability to export oil and gas would be by far the most powerful weapon against the Russian economy, and perhaps the most effective economic deterrent against an invasion of Ukraine, but they would also cause pain in Europe and the United States.“At some point, the West will have to sacrifice a little bit of its well-being if the goal is to deter Putin,” said Maria Snegovaya, a visiting scholar at George Washington University and an author of the Atlantic Council report.“U.S. inflation further constrains the administration’s actions,” she added. “Inflation is already unprecedented for the last 30 years. Any action against Russia that is dramatic will lead to changes in oil and gas prices.”Understand the Escalating Tensions Over UkraineCard 1 of 5A brewing conflict. More

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    U.S. and Others Pledge Export Controls Tied to Human Rights

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    A partnership with Australia, Denmark, Norway, Canada, France, the Netherlands and the United Kingdom aims to stem the flow of key technologies to authoritarian governments.WASHINGTON — The Biden administration announced a partnership on Friday with Australia, Denmark, Norway, Canada, France, the Netherlands and the United Kingdom to try to stem the flow of sensitive technologies to authoritarian governments.The partnership, named the Export Controls and Human Rights Initiative, calls for the countries to align their policies on exports of key technologies and develop a voluntary written code of conduct to apply human rights criteria to export licenses, according to a White House statement.The effort is aimed at combating the rise of “digital authoritarianism” in countries like China and Russia, where software and advanced surveillance technologies have been used to track dissidents and journalists, shape public opinion and censor information deemed dangerous by the government.The announcement was part of the last day of the Summit for Democracy, the White House’s virtual gathering of officials from over 100 countries aimed at bolstering democracies.By working to synchronize export controls across countries, American officials hope to cast a wider net to prevent authoritarian nations from accessing important technologies, as well as help companies with U.S. operations operate on a more even playing field.While a decade ago the internet was seen as a force for democracy and openness, authoritarian governments today have learned that big data, internet controls, artificial intelligence and social media “could make them even more powerful,” Samantha Power, the administrator for the U.S. Agency for International Development, said at the virtual summit on Friday.Ms. Power said the United States would undertake a suite of new measures over the next year to help set global norms around technology and human rights. Those steps include investing up to $20 million annually to drastically expand the digital democracy work of the Agency for International Development, working with like-minded countries to establish principles for open source technology products, and introducing an initiative with Canada and Denmark to lay out how governments should use surveillance technology in a manner consistent with human rights and the rule of law. The United States will also provide up to $3.75 million to fund new “democracy affirming” technologies, like privacy-preserving artificial intelligence, and establish a separate fund for anti-censorship technology, Ms. Power said. The government’s use of export controls, especially against China, greatly ramped up during the Trump administration, which imposed restrictions on ZTE, Huawei and other Chinese technology firms to prevent Beijing from gaining access to sensitive technologies like quantum computing, advanced semiconductor chips and artificial intelligence that could give its military an advantage or build up the Chinese surveillance state.But critics say those measures, by focusing only on American exports, fell short of their goals. While companies that manufacture products in the United States no longer ship certain goods to China, competitors in Japan, Europe and elsewhere have continued to make sales. That has encouraged some high-tech companies to devote more spending on research and development outside the United States, to maintain access to the lucrative Chinese market.American-developed technology has also been used by authoritarian governments for more nefarious purposes, like monitoring and censoring their citizens.In a joint statement issued Friday, Australia, Denmark, Norway and the United States said that “authoritarian governments increasingly are using surveillance tools and other related technologies in connection with serious human rights abuses, both within their countries and across international borders, including in acts of transnational repression to censor political opposition and track dissidents.”They added, “Such use risks defeating the benefits that advanced technologies may bring to the world’s nations and peoples.”The work at this week’s summit included exploring how best to strengthen domestic legal frameworks, share information on threats and risks, and share and develop best practices for controlling technology exports, a White House statement said.In the coming year, the countries are expected to consult with academics and industries on their efforts. Any decisions on controls of specific technologies will be voluntary and left up to individual countries to carry out.The Biden administration has continued a trend, begun in the Trump administration, of leveling export controls at companies engaged in human rights violations, including those that have supported China’s repression of Muslim minorities.This week, the Biden administration announced new restrictions on Cambodia to address human rights abuses, corruption and the growing influence of China’s military in the country. In November, the administration blacklisted the NSO Group, an Israeli technology firm, saying the company knowingly supplied spyware used to target the phones of dissidents, human rights activists and journalists.The administration has also accelerated discussions of export controls with Europe, through a partnership set up this year called the Trade and Technology Council. But given that there is no legal basis for imposing import bans across the European Union, decisions on those restrictions fall to its member states.The United States is already part of a multilateral arrangement on export controls called the Wassenaar Arrangement, which was established in 1996. But critics say the grouping, which has more than 40 members, including Russia, has moved too slowly to match the pace of technological development. More

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    U.S. Threat to Squeeze Russia’s Economy Is a Tactic With a Mixed Record

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    Sanctions, like aiming to cut oil exports, could also hurt European allies. “It’s a limited toolbox,” one expert said.LONDON — When Russian soldiers crossed into Ukraine and seized Crimea in 2014, the Obama administration responded with a slate of economic penalties that ultimately imposed sanctions on hundreds of Russian officials and businesses and restricted investments and trade in the nation’s crucial finance, oil and military sectors.Now, with Russian troops massing on Ukraine’s border, the White House national security adviser has declared that President Biden looked Russia’s president, Vladimir V. Putin, in the eye this week “and told him things we didn’t do in 2014 we are prepared to do now.”Whether harsher measures would persuade Russia to stay out of Ukraine, however, is far from clear. Historically, economic sanctions have a decidedly mixed track record, with more failures than successes. And actions that would take the biggest bite out of the Russian economy — like trying to severely curb oil exports — would also be hard on America’s allies in Europe.“We’ve seen that over and over again, that sanctions have a hard time really coercing changes in major policies” said Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics who has spent decades researching the topic. “It’s a limited toolbox.”President Biden is looking at the options available to ratchet up economic penalties against Russia.Stefani Reynolds for The New York TimesThe best chances of success are when one country has significant economic leverage over the other and the policy goal is limited, Mr. Schott said — yet neither of those conditions really applies in this case. Mr. Putin has made clear that he considers Russia’s actions in Ukraine a matter of national security. And outside of the oil industry, Russia’s international trade and investments are limited, especially in the United States.With direct military intervention essentially off the table, Biden administration officials have listed a series of options that include financially punishing Mr. Putin’s closest friends and supporters, blocking the conversion of rubles into dollars, and pressuring Germany to block a new gas pipeline between Russia and Northern Europe from opening.Work on that pipeline — called Nord Stream 2 — has been completed, but it is waiting for approval from Germany’s energy regulator before it can begin operating.Any request from Washington would coincide with a leadership change in Berlin. The new chancellor, Olaf Scholz, and his cabinet were sworn into office on Wednesday. He has not yet made any definitive statements on the pipeline. Gas reserves are unusually low in Europe now, however, and there are worries about shortages and soaring prices as winter approaches.Russia supplies more than a third of Europe’s gas through the existing Nord Stream pipeline and has already been accused of withholding supplies as a way of pressuring Germany to approve Nord Stream 2.Washington could impose much more sweeping sanctions on particular companies and banks in Russia that would more severely curtail investment and production in the energy sector. The risk of tough sanctions on a company like Gazprom, which supplies natural gas, is that Russia could retaliate by cutting its deliveries to Europe.“That would hurt Russia a lot but also hurt Europe,” Mr. Schott said.In terms of ratcheting up the pressure, James Nixey, the director of the Russia-Eurasia program at the Chatham House think tank, suggested that financially squeezing the oligarchs who help Mr. Putin maintain power could be one way of bringing more targeted pressure.“I would place a great premium on going after the inner and outer circle around Putin, which have connections back to the regime,” he said.At the moment, the swirl of ambiguity about possible United States actions is useful, he added: “It’s quite good if the Russians are kept guessing.”Russia, the United States and the European Union — which on Wednesday proposed expanding its power to use economic sanctions — are all playing something of a guessing game in order to pursue their policy goals. Russia is deploying troops on the border and at the same time is insisting on a guarantee that Ukraine won’t join NATO, while the West is warning there will be painful economic consequences if an invasion occurs.Ukrainian soldiers patrolling along the Kalmius River, which divides Ukrainian government-controlled territory from non-government-controlled areas, in November.Brendan Hoffman for The New York TimesOne of the most extreme measures would be to cut off Russia from the system of international payments known as SWIFT that moves money around the world, as was done to Iran.In 2019, the Russian prime minister at the time, Dmitri A. Medvedev, labeled such a threat as tantamount to “a declaration of war.”Maria Shagina argued in a report for the Carnegie Moscow Center that such a move would be devastating to Russia, at least in the short term. “The cutoff would terminate all international transactions, trigger currency volatility, and cause massive capital outflows,” she wrote this year.The SWIFT system, which is based in Belgium, handles international payments among thousands of banks in more than 200 countries.Since 2014, Moscow has taken steps to blunt the threat by developing its own system to process domestic credit card transactions, she noted. But it is another measure that would affect European countries more than the United States because they do so much more business with Russia.Several economic and political analysts have said restricting access to SWIFT would be a last resort.Arie W. Kruglanski, a psychology professor at the University of Maryland, said that in assessing the impact of sanctions, economists too often overlook the crucial psychological aspect.“Sanctions can work when leaders are concerned about economic issues more than anything else,” he said, but he doesn’t think the Russian leader falls into that category. To Mr. Kruglanski, strongman authoritarians like Mr. Putin are motivated by a sense of their own significance, and threats are more likely to stiffen opposition rather than encourage compromise.When it comes to Ukraine-related sanctions so far, the impact has been negligible, Mr. Nixey of Chatham House said.“A lot of these things the Russians have learned to live with, partly because implementation has been slow or poor and effects on the Russian economy are manageable,” he added.Success can be defined in various ways. Mr. Nixey said that the 2014 measures most likely deterred the Kremlin from further military interventions in Ukraine. A report for the Atlantic Council, a think tank that focuses on international relations, released this spring came to the same that conclusion.Sanctions certainly did not compel Russia to reverse its annexation of Crimea, Mr. Nixey said, but they may have persuaded Mr. Putin from taking more aggressive actions — at least until now. More