At the start of Russia’s invasion of Ukraine a week ago, almost every analyst agreed that Russian oil and gas would keep flowing westwards. The state of mutual energy dependence seemed too entrenched. On one side, the EU could not decouple itself easily from the source of 38% of its natural gas imports. On the other, Russia under financial sanctions would need cash. Old hands reflected that, even in the long decades of the cold war, the Soviet Union and Europe maintained commercial relationships in energy.
A week later, such thinking looks naive. The “shock and awe” financial sanctions, especially those aimed at Russia’s central bank, exceed anything previously seen, but the shortcoming is obvious: if you really want to hit the Russian economy hard, the place to aim is its energy export sector, a part that has been spared sanctions so far and generates hundreds of millions of dollars daily. The point is made repeatedly by Ukrainian officials in their appeals for the trade to cease, and its moral force is hammered home with every fresh Russian atrocity.
