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Energy sanctions and the global economy: mandated vs unilateral sanctions

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  • Christof Rühl

    (Center On Global Energy Policy, SIPA, Columbia University)

Abstract

The world is witnessing an unprecedented episode of ‘economic warfare’, with more than 30% of global GDP (the G7’s share) pitched against 11% of global energy production (Russia’s share). This paper analyzes oil sanctions against Russia. It shows that the risk of tighter sanctions backfiring, and harming the economies of the sanctioning countries, is manageable. In terms of sanction design, sanctions and embargo announcements have so far been decentralized and voluntary. In previous episodes, sanctions have been enforced, and breaching them was punished. The paper asks whether the unilateral or the mandated model will be more successful in maximizing damage to Russia’s energy revenues, while minimizing economic damage to the sanctioning alliance. Given the scale of Russia’s supplies, a gradual approach is called for. The optimal strategy uses unilateral sanction picking as long as Russian energy exports are large enough to pose a systemic threat; and sanction enforcement thereafter.

Suggested Citation

  • Christof Rühl, 2022. "Energy sanctions and the global economy: mandated vs unilateral sanctions," International Economics and Economic Policy, Springer, vol. 19(2), pages 383-399, May.
    • Handle: RePEc:kap:iecepo:v:19:y:2022:i:2:d:10.1007_s10368-022-00542-9
    DOI: 10.1007/s10368-022-00542-9
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    References listed on IDEAS

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    More about this item

    Keywords

    International economic policy; Sanctions; Energy;
    All these keywords.

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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