Russia’s coldest sanctions from the west, including a large arms embargo, offshore energy restrictions and restrictions on Russian bank trading in Europe will not just hurt the country, but also the EU. Russia is the EU’s biggest trading partner amounting to £272 billion the previous year. The inflation in Russian energy production would mean bigger costs for the EU as well.
Despite being a small economy, Russia’s energy sources are vast. Russia’s main export is energy and the EU takes 45% of Russia’s 60% energy exports.
Banking experts said that the West can be hit by its own bullet. Russian banking sanctions will hit the United Kingdom and the US because if the Russian banks can handle it on their own, they may decide to reduce or ultimately cut ties to the global financial industry.
The situation could also isolate Russia from the rest of the world, a reminiscent of its cold war condition. Russia may look for banking partners from other countries, such as China or Hongkong. Russian investors who have homed in on London and other countries may also earn bigger as the Russian Rouble loses its value.
Russia is also the biggest arms exporter in the world, making its imports from other countries less in number. It also meant that the United States and sanctioning countries cannot trade arms with the country, which could hurt their own respective economies as well.