How the West is fighting Russia with sanctions as a weapon — the story so far

The North Atlantic Treaty Organization, or NATO, is an intergovernmental military alliance. It has a total of 30 member states — 28 European states, the United States, and Canada. The organisation was established in 1949 as a measure of security against the Soviet Union.

With Ukraine seeking to establish ties with NATO, Russia deemed fit to invade the country purportedly to safeguard its borders and the people within.

West's involvement in the war

The West hasn't been a mere spectator to the crisis in Ukraine. While it did not enter the battlefield directly, it has kept up a steady supply of ammunition to Ukraine. Also, it imposed a large number of sanctions aimed at weakening the Russian economy.

Sanctions are financial penalties that a government or authority imposes on another entity as a means of punishment.

Also read: EU resolves deadlock with Hungary, agrees to cut Russian oil imports by 90%

Russia is one of the world’s biggest exporters of oil, which is a major source of income for the country. The US has banned imports of Russian oil and natural gas while the EU has lashed its Russian gas imports by two-thirds (banning import of oil transported by sea) — an attempt to ban the import in a phased manner. UK too will cease imports in a phased manner by the end of the year.

EU has a Russian coal import ban by August in the pipeline.

In order to prevent Russia from using its $630 billion (£470 billion) of foreign currency reserves, the central bank's assets have been frozen and county's banks have been removed from SWIFT, the international financial messaging system. The EU, UK, US and Canada have barred Russian airlines from their airspace.

Also read: How Russian billionaire Melnichenko shielded assets from European sanctions

Apart from the country as a whole, sanctions have been imposed on individuals, including Putin, the orchestrator of the war. The British government has also halted the sale of "golden visas," which enabled wealthy Russians to become British citizens.

More than 1,000 foreign companies have stopped investing in Russia. For instance, 30 years after establishing in Russia, McDonald's is exiting the market. UK and EU have banned export of luxury items to Russia.

Also read: US backs Russian grain exports amid global food supply shortage

How these sanctions affect Russia

Oil was a huge source of income for Russia. Even though China, and India too, continue to export large quantities of oil from Russia, the country is suffering huge losses. Before slashing the imports, the EU had been a source of over $1 million a day for Russia as it imported humongous amounts of crude oil and oil products.

Also read: As global brands exit Russia, Indian retailers rush in to fill the gap: Report

A removal from SWIFT means that the transactions in return for exports is slow. The freezing up of the foreign reserves obstructs Russia’s ability to make international payments.

These sanctions aim to make Russia economically weak and stop their supply of money, which in turn goes to backing the war efforts. An import-dependent nation, Russians citizens are bearing the brunt of the sanctions. In April, inflation touched the 20-year high of 17.8 percent.