‘Big Holes’ Undermine Russia Sanctions – And It's Not Crypto (Psst! It's Traditional Politics & Finance)

cryptonews.com:

An opinion columnist writing for Bloomberg has identified two flaws that “fundamentally undermine” the United States and EU-led “sanctions regime” against Russia – and neither have anything to do with the use of crypto.

Since the start of the conflict in Ukraine, senior lawmakers in the USA and elsewhere have claimed that wealthy Russians will look to crypto to sidestep sanctions. 

But the columnist, Paul J. Davis, appears to believe that conventional finance (aka tradfi) and politics provide far more effective loopholes than crypto transactions.

The first major failing with the sanctions is that “Russia is still allowed to sell all the fossil fuels it likes.” And secondly, Davis wrote Moscow “seems able to use the dollar earnings from those sales to support the ruble.” (Ruble is now down around 17% against USD since the invasion started one month ago, but it jumped over 50% since March 7.)

Doing this, he noted, allows Moscow not only to pump USD into propping up the RUB, but also pay directly for the import “of the tools of war” from countries that “haven’t signed on to the sanctions.”

The only way to close these “holes” is to ban all energy sales from Russia. But as EU nations still remain largely dependent on Russian oil and gas, such a move remains “unpalatable” even for the more hawkish of EU members.

Further, Bloomberg claimed that “Russia’s global oil and gas exports are bringing in about USD 900 million a day.”

Davis claimed:

“Russia’s energy trade has suffered but not nearly as much as expected initially.”

Oil is reportedly still trading by sea from Russia’s Baltic and Black Sea ports – with gas flowing by pipeline to both European nations and China.

Economists at the Federal Reserve Bank of Dallas were quoted as stating