Sanctions on Russia: How They Impact Europe Energy Security and the Region

As Russia’s war in Ukraine continues, Western sanctions are beginning to chip away at the Kremlin’s war machine. Although President Vladimir Putin appears undeterred, the sanctions are draining resources that could otherwise fund the conflict.

How Sanctions Work?

According to Maria Perrotta Berlin, Assistant Professor at the Stockholm Institute of Transition Economics (SITE), sanctions are most effective when they come as a surprise. “If the threat of sanctions didn’t deter aggression, their implementation is unlikely to change behavior — unless they are more severe than expected,” she explains.

Sanctions, however, are a blunt instrument. They can unintentionally harm other economies and are rarely effective on their own. Maria Perrotta Berlin notes that “the stick of sanctions works best when paired with a carrot”. For instance, offering a clear path toward lifting restrictions, as was done in Iran’s nuclear negotiations.

The Three Types of Sanctions on Russia

Currently, three main categories of sanctions are in place against Russia:

• Financial sanctions: including restrictions on the Russian Central Bank, disconnection from the SWIFT system, and asset freezes. These measures have the most immediate impact.
• Trade sanctions: particularly on technology imports and energy exports. These take longer to affect the Russian economy and are more costly to sender countries.
• Sanctions of inconvenience: such as airspace closures, travel bans, and exclusion from international sports and cultural events. While symbolic, they contribute to isolating Russia on the global stage.

Such isolation can influence public opinion within Russia. It may generate opposition to the government — or conversely, trigger a “rally around the flag” effect that strengthens domestic support for Putin.

Signaling and Solidarity

Despite Putin’s resistance, the sanctions are sending a powerful signal both within Russia and abroad. They demonstrate the unity of Western nations and highlight that much of the world condemns Russia’s actions in Ukraine.

Experts say there is still room to tighten sanctions by expanding the list of targeted individuals, banks, and sectors, as well as closing loopholes used to bypass restrictions.

Regional Impacts: Belarus and Georgia

The FREE Network webinar, “The Sanctions on Russia, and Their Impact on the Region,” brought together experts from Belarus and Georgia to assess the broader consequences.

Belarus faces additional sanctions due to its support for Russia’s aggression. The country has already lost key export routes through both Russia and Ukraine. Its economy is reeling from the depreciation of the Russian ruble and fears of a banking crisis.

In Georgia, the war in Ukraine revives painful memories of the 2008 Russian invasion. While Georgia relies less on Russian gas than the EU, it remains vulnerable to rising oil prices and inflation,  already at 13.7%. Nearly 90% of Georgia’s wheat comes from Russia, making food security a growing concern.

Learn More About the Russian War Economy and Sanctions

To learn more about Western sanctions and Russia’s countermeasures, visit the Sanctions Timeline. And for details on sanctions imposed on Russia and their effects, see the Evidence Base section of the sanctions portal. Explore more policy briefs on sanctioning Russia here.

Disclaimer: Opinions expressed during events, seminars and conferences are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.