It’s been a little more than six months since the full brunt of Western sanctions took force against Russia. The punishment, while slow in coming, has proven devastatingly effective—especially when paired with the crash in oil prices.
Last summer, of course, U.S. and European Union officials had no way of knowing an epic oil selloff was right around the corner. But in hindsight the coordination seems uncanny. Oil prices peaked less than a month before the sanctions were announced. By November, the combination of cheap oil and tighter sanctions was bleeding Russia of billions in budget revenue and had cut it off from the world’s largest capital markets. In December, state-owned oil giant Rosneft had to get a loan backed by the Central Bank of Russia, which is sort of like the U.S. Fed giving a loan to ExxonMobil.