Impact of Sanctions for the Development of Oil Producing Countries

Abstract

The purpose of this study is to assess the prospects for the functioning of the Russian economy in the context of the imposed sanctions based on a generalization of international experience. Materials and methods. The main methods were a comparative analysis of the development of countries under sanctions restrictions and a retrospective analysis of the formation of oil and gas revenues in the Russian Federation. Results. Using the example of Iran, it has been established that a high share of oil and gas budget revenues and a favorable oil price environment allows maintaining the existing economic model, however, the tightening of sanctions is gradually having a more negative impact on the welfare of the population in Iran, as well as on the state of the country's budget. The paper also examines the measures taken by the Bank of Russia in 2022 in order to ensure the stability of the country's financial system; it was found that the impact of sanctions was largely delayed due to the focus of the European Union on the priority satisfaction of its own energy needs. Conclusions. The main result of the study is the position that in assessing the effect of sanctions on the development of oil-producing countries, it is necessary to assess the equivalence between import and export restrictions in order to further assess the private effects on the welfare of the population and budget losses. The stabilization of the exchange rate allows the Russian government to lock in inflation expectations for the moment and support consumption, but this comes at the expense of financial suppression of domestic development instruments. The consequences of such decisions in the medium term may be the fall of the ruble and further weakening of the ability to finance public spending.