Since Russia invaded Ukraine, the West has imposed tough sanctions against Russia in a bid to force Putin to cease the invasion. American polls show that individuals in Washington want even more to be done to reduce the profits from natural gas and oil sales made by Russia.
For instance, a poll conducted by the NORC Center for Public Affairs Research and the Associated Press discovered that more than one-half of its respondents would like President Joe Biden to be tougher on Putin.
Former and current U.S. officials and economists state that America could achieve strong results from taking various courses of action, which include shutting down a number of inroads that Russia has made into the financial and political systems in the United States. While the government could also pour potent weaponry and cash into Ukraine, many believe that decreasing proceeds from the sale of natural gas and oil from Russia would be the biggest trigger. However, for this to be done, there has to be a way to reduce the Eastern European country’s proceeds without prompting an increase in energy prices globally.
Currently, international purchases of gas and oil produced in Russia make up roughly 40% of the government’s revenue.
Thus far, President Biden has already put an end to minor imports of oil and other fossil fuel products from Russia. Despite this move, however, the sanctions have had no effect on Russia’s economy, which is being kept afloat by exports.
The Institute of International Finance’s deputy chief economist, Elina Ribakova, stated that this war was boosting the price Russia got for gas and oil, which drove surplus in its current accounts to almost $60 billion, a significantly high increase. During an online panel with the Bendheim Center for Finance, Ribakova stated that policymakers and economists were currently focused on deciding the next steps as part of the larger context of the cost of Ukranian lives, the risk of nuclear war and warring militaries. She explained that all these costs were taken into account prior to imposing sanctions.
Currently, plans are underway to bar the country from hosting a meeting of its World Heritage Committee in June. The country, which is also facing a push to strip it of its UNESCO presidency, has already been suspended from the United Nations Human Rights Council. However, there is no indication that it will be suspended from the Food and Agriculture Organization, the World Health Organization or the International Civil Aviation Organization.
As Russian oil is banned by different countries, the stock of companies such as Alliance Resource Partners (NASDAQ: ARLP) are likely to rally as oil prices rise around the world.
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