Russia’s economy is poised for recession, the Ruble lost 20% of its value and continues to plummet, but a successful gamble on Ukraine may erase those woes.
On Saturday, the United States and its allies announced sanctions including a ban on Russia’s use of the SWIFT payment system. The “Society for Worldwide Interbank Financial Telecommunication” is based in Belgium and is the primary payment method for large international transactions. Cutting Russia off of SWIFT will make it harder and riskier to buy anything from them, such as natural gas and oil.
The country is the EU’s primary source of natural gas and crude oil. As of right now, sanctions don’t directly target these resources, but countries may find alternatives as exchange with Russia becomes more challenging. Blocking Russian access to SWIFT essentially removes them from a bevy of global markets.
Apart from natural gas, Ukraine abounds with minerals such as iron, coal, titanium, and other non-metallic raw materials. It’s the leading nation when it comes to reserves of titanium, iron and non-metallic raw materials.
Western countries are already struggling to deal with the sudden cut off brought by sanctions. President Joe Biden and other world leaders have been halting drilling at home and putting significant barriers on fuel production in the name of climate change.
Russia may not need SWIFT. Russia may not need British Petroleum (BP), who dropped their nearly 20% stake in Russian state-owned Rosneft. The world may have no choice but to come knocking at their door in dire need of Russia’s unrestricted resources.