Energy sanctions and the global economy: mandated vs unilateral sanctions

Christof Rühl ()
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Christof Rühl: Center On Global Energy Policy, SIPA, Columbia University

International Economics and Economic Policy, 2022, vol. 19, issue 2, No 7, 383-399

Abstract: 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.

Keywords: International economic policy; Sanctions; Energy (search for similar items in EconPapers)
JEL-codes: E65 F51 Q34 Q43 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10368-022-00542-9

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