The effects of oil and gas embargo will be felt by Russian population earliest by the end of summer, effectively being a punishment rather than a deterrent. We should aim to end the war long before that and stop talking about this and other populist but unrealistic ideas like no-fly zone.
In the short term we are seeing employees at European harbors and other places being put to the moral dilemma of either refusing to work or continuing working with Russian transports, knowing that they are working directly with the economic side of the Russian military branch. Many do not want to have to look in the mirror in a few months, knowing what they did, knowing what they knew, feeling like they have blood on their hands. Saving jobs and saving the economy is a poor comfort when on the news they see ordinary citizens laying on the street with a bullet in the head.
Every nation hope that wars will end in just a few days, weeks or months. Blitzkrieg. It will be over by the weekend. The Russian thought so when they entered Ukraine and they were wrong. It a nice aim to hope that the war will be long gone before the summer, but realistic there is a high risk that it won't. The assumption when funding war should be that the war isn't going to end.
Russia is not a banana republic where you could possibly find the direct link between the export revenues and military expenses. This is not how Russian economy works, the picture is much more complicated.
First of all, the revenue from oil and gas sales is collected in foreign currency. Russian budget receives the money in taxes paid by exporters, but these money must be converted first to rouble. The conversion rate can be regulated by the central bank through purchases and sales of the currency and they of course can print money when necessary. This means that this currency actually never reaches the recipients of the budget money and exchange rate can be adjusted to serve the needs of the economy.
Second, Russia produces nearly all of its military equipment and pays for it in rouble. There's almost no mercenaries in this conflict, it is mostly regular army, which also receives their salaries in rouble. They have very low exposure to external economic shocks and if necessary can switch to the war economy mode at the cost of the rest of Russian population.
Now, what happens if Russia stops exporting oil and gas to Europe? Just in the last year Russia collected 50% more money than it planned in the annual budget. The extra money are usually deposited in the Reserve Fund and National Wealth Fund and re-invested, but they can be used in crisis times. Basically, just in the last year Russia collected enough money to survive 6 months of oil and gas trade embargo (and this is 150% of its military budget). Let's say, some of these money are frozen on European and American bank accounts and cannot actually be used except for servicing the debt. Still plenty of these savings are still accessible. Besides that, Russian central bank can still print money to fund the war. This may result in even higher inflation, but the economic bloc of Russian government is extremely competent and can mitigate the impact on the population.
Ordinary Russian people will inevitably notice the economic downturn, but their mentality is the mentality of survival and mobilization, plus the state propaganda can justify the means very convincingly and repressive apparatus can silence those who disagree. We are talking about many years of attrition until the economic situation becomes untolerable. No sanctions in the world will force Russian people to overthrow the government in the next year or two, just like they did not work for North Korea, Venezuela or Iran.
That is incorrect. The oil and gas companies is owned by a few oligarchies with direct ties to Putin and the Russian government. Based on what secret service and other agencies has leaked, there isn't a major difference between what is the Russian government, what is controlled by Putin, and what is owned by the owners of the oligarchies. To a degree they operate just like a banana republic in this aspect, although a better comparison is likely state owned Chinese companies that get funded, instructed, operated by government personal, given benefits by their secret service, and with party representatives being directly involved in the leader structure and ownership.
And it may indeed take years before the sanctions actually hurt enough for the Russian government to start move to the peace table. American war in Afghanistan took 20 years. Iraq started in 2003 and ended in fully in 2021. Their war in Pakistan took 14 years. Yemen is still ongoing, same in Somalia, and Syria.
6 months would be comparable short, and it is not out of the question that it may take many years. The more funds they get the easier they have in continuing operations. And while Russia produces nearly all of its military equipment, just like the US does, both require a lot of imports to actually do the production. Military equipment require a lot of electronics, much which isn't produced in Russia. Machines, vehicles, technology and tools all depend on international supply chains, and the more isolated the nation is the harder and more money they need to spend on maintaining those critical imports. All while the nations population suffer from the economic downturn. At some point reserves gets low and that is when peace is best pursuit.
