Explained | The major financial and commercial sanctions on Russia

Sanctions imposed on Russia are both financial and economic. It bothers the country’s undertakings in the energy, defence technology and aviation realms.

Owing to its geopolitical actions in the Ukraine, Russia has been the subject of a wide spectrum of financial and economic sanctions from the West. The sanctions are not just restricted to the President and the Duma, but extends to Russian individuals and companies operating in the energy, aviation and defence technology realms.

It has been excluded from the SWIFT financial system, which has restricted its ability to avail foreign exchange, further bothering the domestic currency and economy.

The European Union (EU) on February 25 introduced an export ban on Russia pertaining to equipment and technologies relevant to oil refining and related services. The European body argued the move would “make it impossible” for Russia to upgrade its oil refineries. As per its data, Russia’s export revenue stood at €24 billion in 2019.  

White House, earlier in March, stated that the Commerce Dept also instituted restrictions on technological exports that could potentially support Russia’s refining capacity in the long term. It described refining as a key pillar supporting the Russian military. “The United States and our Allies and partners do not have a strategic interest in reducing the global supply of energy – which is why we have carved out energy payments from our financial sanctions. But we and our Allies and partners share a strong interest in degrading Russia’s status as a leading energy supplier over time,” the statement read.  

North American oil and gas company ExxonMobil opted to discontinue its Sakhalin-1 venture in Russia. Additionally, it communicated its decision of not investing in a new development in the country. 

London-based energy company BP opted to divest its 19.75% shareholding in the Russian company Rosneft. 

EU in February stated that member states would not permit Russian air carriers to land, take-off or overfly in their territories. Previously, it placed an export ban on goods and technology in the aviation and space industry alongside a prohibition on providing insurance, reinsurance and maintenance services to Russian aviation service providers.