- The fast-emerging geopolitical and geostrategic situation must compel global leadership to come out with measures that not only ensure the larger good of the universe but are also practically implementable yielding desired results. Stronghand methodologies hardly serve the purpose but smart and pragmatic strategies keeping in mind the ground realities should always be encouraged. However, the world is hardly ideal as the most advanced nations tend to go overboard while attempting to discipline the errant countries. Take for instance the ongoing conflict between the Russian and Ukrainian forces which offers no closure despite monumental efforts to stop the mindless aggression. Now, sanctions imposed on Russia have hardly had any fruitful impact.
PC: FT Reporters
- Mind you, using blunt instruments like sanctions most often than not turn out to be counterproductive failing to deliver anything concrete on expected lines. We know how ineffective or limitedly effective the sanctions imposed on the Russian establishment are playing out. Recently, G7 plus Australia has imposed a price cap of $60 a barrel on seaborne export of Russian crude oil to further squeeze the country’s revenue and thereby undermine its war-fighting capabilities. The price cap represents a 30% discount to the price of the benchmark Brent crude. The group which has elicited the support of the EU as well plans to enforce the ceiling price by using its clout with the major shipping, insurance, and re-insurance companies headquartered there.
- Of course, the stated aim is to weaken the Russian military without triggering a spike in oil prices. Make no mistake, it’s bound to fail. Also, many beleaguered emerging market economies will be affected by the collateral fallout of this attempt. Russia’s continued aggression provides more evidence that sanctions only end up hurting countries unrelated to the problem, without achieving any of the core objectives of Western nations imposing sanctions. Look not far than the futility of sanctions imposed on Iran since 1979 failing to have any meaningful impact on Iranian foreign policy. Ironically, as the American media reported, Iranian drones used by the Russian military have sourced critical components from both Europe and the US.
PC: Club of Mozambique
- Indeed, none of the sanctions have prevented Iran from developing its armament capabilities while they have hurt countries such as India that sourced crude oil from there. Needless to mention, India did well to ramp up purchases this year of discounted Russian crude. No wonder, Russia is now India’s third largest crude supplier from being practically irrelevant a year ago as a source of supply. Yes, the new price cap has enough loopholes to keep Russian oil exports going. Thus, the meaningless nature of the current price cap is reflected in the Ukrainian government’s view that it just won’t achieve its core aim of deterring Russia. In conclusion, sanctions are no good but pursuing meaningful talks, persuasion, and diplomatic skullduggery could be.
