White Underestimates Bombardment of Western Sanctions, Thinks Russia Will Be More Invulnerable

KOMPAS.com – Government Russia stated that they would face a new economic crisis following a series of economic sanctions from the United States (US) and its allies from Western countries.

Putin also threatened to retaliate against the economic sanctions imposed. Retaliation will be carried out starting from a ban on the export of strategic products to plans to take over the assets of companies that leave their country.

Putin believes that over time his country will be immune to various economic sanctions. On the other hand, the policies of the US and its allies will harm their own economies.

Putin admits that the prices of food and energy needs in Russia have indeed increased. But gradually, the Kremlin will solve the problem and will make the country stronger in the future.

Also read: Get to know SWIFT, the Economic Sanctions That Troubled Millions of Russians

“These sanctions will be imposed in any case. There are some questions, regarding the problems and difficulties (which are happening at the moment), but in the past we have overcome them and we will deal with them now,” Putin was quoted as saying. AljazeeraMonday (14/3/2022).

Moreover, according to Putin, Russia has often been the target of economic embargoes from the US and its allies for decades. But in reality, the Russian economy is getting stronger.

“In the end, these (economic sanctions) will lead to an increase in our independence, self-sufficiency and sovereignty,” Putin stressed.

The invasion of Ukraine, which Putin described as a special military operation, was seen as an option Moscow had to take. Putin considers that the threat to Russia’s sovereignty is not worth the short-term economic losses due to Western economic sanctions.

Also read: How Poor is Ukraine?

Putin said that even though his country had received various economic sanctions from the West and a number of companies, Russia would still supply a third of its gas needs to Europe in accordance with its purchase contract obligations.

He emphasized that the Russian people will be stronger because they are used to various economic sanctions. Russia’s experience in dealing with the embargo is proof of that.

“It is clear that at such times the demand of society for certain groups of goods always increases, but we have no doubt that we will solve all these problems while working calmly,” Putin said.

“Gradually, people will adjust, they will understand that there is no event that we can’t cover up and work on,” he continued.

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Oil prices soar in the US

Quoted from CNN, Vehicle owners in the United States complain that they now have to pay more for petrol than ever before. The price for a gallon of gasoline soared to 4.17 US dollars or Rp. 59,580 (exchange rate of Rp. 14,280).

One gallon of gasoline in the United States is equivalent to 3.78 liters. This gasoline price broke a record high in July 2008, when a gallon of gasoline was priced at 4.11 US dollars.

When Russia began to invade Ukraine, the price of oil and gas had increased significantly in a relatively short period of time. Oil prices in the US were also exacerbated by the damage to several refineries following Hurricane Katrina.

Head of Global Energy Analyst, Tom Kloza, said that the price of gasoline and gas in the US is certain to continue to increase. In the last two weeks, gasoline prices rose about 55 cents, then rose again 63 cents per gallon.

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“I think it will reach 4.50 US dollars (gasoline price per gallon). The risk (which must be anticipated) is how bad and how long this will last. Maybe even (gasoline price) could reach 5 US dollars per gallon” said Kloza.

As is known, although imported oil from Russia is relatively small, which is only 2 percent of the total imports of US fuel, Russia is one of the major producers of global oil.

In other words, Russia could drag world oil prices up too. The impact can spread to many countries. Not to mention, Russia also supplies a very large amount of natural gas to Europe which of course will also affect oil prices.

So that even without Biden’s embargo policy, with Putin’s decision to attack Ukraine, oil prices in the US have skyrocketed because they follow global oil prices.

According to Kloza, if the US and its allies further pressure Russia with economic sanctions, Putin could be even more desperate to stop shipping oil and gas to Europe in retaliation.

Also read: How is Timor Leste’s economy after 18 years of independence from Indonesia?

“If this happens, the concern (of an increase in fossil fuel prices) will last longer,” said Kloza.

To anticipate a reply from Putin, the United States has already squared off looking for other oil-producing countries. The targeted countries are Iran, Saudi Arabia and Venezuela.

The problem is, with Iran and Venezuela, the United States has not had a good relationship. The US has long had complicated relations with the two countries.

In recent years, the two countries have been accused of everything from electoral fraud to human rights atrocities. Specifically for Iran, the US also accused the country of developing nuclear weapons.

Meanwhile with Saudi Arabia, despite its status as a long-time ally, President Joe Biden had referred to Saudi Arabia as a “pariah” because of its role in the murder of Saudi journalist Jamal Khashoggi. In fact, Biden had released a US intelligence report that suspected the involvement of Saudi Crown Prince Mohammed bin Salman.

Also read: 22 Years Separated from Indonesia, Why is Timor Leste Loyal to the US Dollar?

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