In a significant geopolitical shift, Russia is experiencing a growing sense of isolation as its longtime allies, including China, Turkey, the United Arab Emirates (UAE), and India, demonstrate increased caution in the face of escalating US sanctions. These sanctions, imposed in response to Russia’s ongoing war in Ukraine, have prompted these nations to reassess their engagements with Moscow, aiming to avoid the repercussions of US secondary sanctions.
Allies rethink their stance
As per a Newsweek report, several of Russia’s crucial partners have started adjusting their financial interactions to sidestep potential US penalties.Notably, prominent banks in China have ceased transactions with sanctioned Russian financial institutions. Similarly, Armenia and Kyrgyzstan have rejected the Russian Mir payment system, a move following Visa and Mastercard’s suspension of operations in Russia due to the conflict in Ukraine.
India, previously a significant buyer of Russian oil, has reportedly ceased payments for Russian premium crude, signaling a distancing from Moscow. This cautious approach by Russia’s allies is attributed to fears of US retaliation, with banks in China, Turkey, and the UAE hesitant to facilitate transactions that could attract American sanctions, the Newsweek report said.
The impact of US sanctions
The US has steadily intensified sanctions against Russia since the conflict’s outset in February 2022, aiming to cripple the Russian economy by targeting its “main artery” through measures such as freezing foreign exchange reserves and banning Russian oil imports. In December, President Joe Biden‘s executive order empowered the US to directly sanction foreign banks involved in significant transactions for Russia, putting additional pressure on Moscow’s financial system.
Treasury secretary Janet Yellen emphasized the US commitment to taking “decisive, and surgical, action against financial institutions that facilitate the supply of Russia’s war machine,” highlighting the determination to undermine Russian aggression.
Delays and disruptions
These sanctions have led to considerable disruptions in Russia’s trade and economic relations, with delayed payments for crude and fuel becoming increasingly common. The apprehension among banks in China, the UAE, and Turkey reflects a growing realization of the tangible threat posed by US secondary sanctions. Some banks in the UAE have even suspended accounts linked to the trading of Russian goods, further complicating Moscow’s attempts to navigate the sanctions landscape.
Kremlin spokesperson Dmitry Peskov acknowledged these challenges, admitting that US and EU pressure on China, in particular, has created “certain problems” for Russia’s trade relations. Despite these hurdles, Peskov remains optimistic about the continued development of trade and economic ties with China.
Allies rethink their stance
As per a Newsweek report, several of Russia’s crucial partners have started adjusting their financial interactions to sidestep potential US penalties.Notably, prominent banks in China have ceased transactions with sanctioned Russian financial institutions. Similarly, Armenia and Kyrgyzstan have rejected the Russian Mir payment system, a move following Visa and Mastercard’s suspension of operations in Russia due to the conflict in Ukraine.
India, previously a significant buyer of Russian oil, has reportedly ceased payments for Russian premium crude, signaling a distancing from Moscow. This cautious approach by Russia’s allies is attributed to fears of US retaliation, with banks in China, Turkey, and the UAE hesitant to facilitate transactions that could attract American sanctions, the Newsweek report said.
The impact of US sanctions
The US has steadily intensified sanctions against Russia since the conflict’s outset in February 2022, aiming to cripple the Russian economy by targeting its “main artery” through measures such as freezing foreign exchange reserves and banning Russian oil imports. In December, President Joe Biden‘s executive order empowered the US to directly sanction foreign banks involved in significant transactions for Russia, putting additional pressure on Moscow’s financial system.
Treasury secretary Janet Yellen emphasized the US commitment to taking “decisive, and surgical, action against financial institutions that facilitate the supply of Russia’s war machine,” highlighting the determination to undermine Russian aggression.
Delays and disruptions
These sanctions have led to considerable disruptions in Russia’s trade and economic relations, with delayed payments for crude and fuel becoming increasingly common. The apprehension among banks in China, the UAE, and Turkey reflects a growing realization of the tangible threat posed by US secondary sanctions. Some banks in the UAE have even suspended accounts linked to the trading of Russian goods, further complicating Moscow’s attempts to navigate the sanctions landscape.
Kremlin spokesperson Dmitry Peskov acknowledged these challenges, admitting that US and EU pressure on China, in particular, has created “certain problems” for Russia’s trade relations. Despite these hurdles, Peskov remains optimistic about the continued development of trade and economic ties with China.