As U.S. and European officials began imposing sanctions in their face-off with Russia over Ukraine, Putin’s $160 billion in oil and natural gas exports may be his most potent weapon to limit punitive measures.
The U.S. and its European allies have few levers to deter Putin even as they warn Russia not to annex Crimea after the referendum in Ukraine. The EU this week imposed travel-visa bans and assets freezes on 21 individuals and President Obama issued an executive order naming seven Russians for sanctions.
Russia exported $160 billion worth of crude, fuels and gas-based industrial feedstocks to Europe and the U.S. in 2012. While shutting the spigot on Russian energy exports would starve the Moscow government of essential flows of foreign cash, the price may be too high for European consumers and it may not alter Putin’s plans.