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The U.S. and other countries have implemented what analysts describe as unprecedented economic punishments against Russia since it invaded Ukraine more than a month ago. Governments have targeted Russian banks, oligarchs, legislators and even President Vladimir Putin himself.

But as unique as these sanctions have been in terms of their scope and the number of countries levying them, one thing they haven’t done is put a stop to Russia’s attacks against its neighbor and former Soviet republic. President Joe Biden himself admitted the limits of these actions a little over a week ago, even as he announced a batch of new ones.

“Sanctions never deter,” Biden said in Brussels after a historic multilateral meeting focused on the war in Eastern Europe. “The maintenance of sanctions … is to be sure that after a month, we will sustain what we’re doing not just next month, the following month, but for the remainder of this entire year. That’s what will stop him.”

The war hasn’t stopped, but the president noted that further steps from a wide-ranging coalition of countries could be taken with a goal toward “increasing the pain” for Putin. The U.S. last week took new action targeting individuals and entities involved in sanctions-evasion networks. Biden and Ukrainian President Volodymyr Zelenskyy also spoke on Wednesday about the possibility of additional sanctions against Russia.

But what might be next is unclear. Analysts argue that the relatively small list of actions yet to be imposed against it are the ones that could cause Russia the most financial pain. That pain, though, would likely cut in all directions – spreading its fallout even to the nations that levied sanctions due to European reliance on Russian energy and the unintentional consequences that meddling with financial institutions could have for an integrated global economic system.

So what those next steps might be and whether they are actually taken is difficult to envision. The effects of existing sanctions are already being felt across Russia. And they are likely to get worse. A March study by the Institute of International Finance projects the Russian economy to contract 15% in 2022, which would wipe out 15 years of economic growth in the country. And the sanctions have not yet taken their maximum toll – that will likely come in the second quarter of this year “just because the financial system will be gummed up,” says Clay Lowery, the institute’s executive vice president for research and policy. Some of the sanctions, particularly the ones focused on high-tech products, will “have a more corrosive effect over time,” adds Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics.

“Certainly Russia's the largest and most integrated economy ever to be hit with sanctions of this magnitude,” adds Ben Coates, an associate professor at Wake Forest University who is researching the history of economic sanctions in the 20th century.

The Russian economy, however, has shown signs of early recovery. The nation’s currency, the ruble, fell nearly 30% against the dollar in the days immediately following Russia’s invasion on Feb. 24, but it has stabilized recently and even appreciated somewhat, according to Coates. Despite inching ever closer, Russia also hasn’t defaulted on its government debt yet, and most Russian companies have been able to pay off their own. Part of this is because the country is still able to earn foreign exchange by selling a lot of oil, he adds.

“If that were to stop completely, that would definitely ramp up the economic pressure,” Coates says.

The conversation around Russian oil has become the elephant in the room when it comes to sanctions. Russia is the world’s second-largest oil exporter, and that has kept the country afloat in the face of the global economic actions against it. The U.S., U.K., Australia and Canada have all instituted some forms of bans on Russian oil, according to a sanctions timeline by the Peterson Institute, but those countries aren’t large importers of it.

Most European countries have yet to follow suit, likely because of their heavy reliance on Russia’s oil and gas. About 60% of Russian oil exports go to the European members of the Organization for Economic Cooperation and Development, according to the International Energy Agency. Lowery says the existing sanctions package overall, while tough, is “largely symbolic right now” and “not the thing that could move the needle.”

But news of gruesome violence in Ukraine over the weekend and more claims of Russian war crimes are causing some European leaders to use stronger language. Charles Michel, president of the European Council, said in a Sunday tweet that more European Union sanctions “are on their way” but did not call out oil or gas specifically. French President Emmanuel Macron said in an interview with France Inter radio that what happened in Bucha should lead to “a new series of sanctions and very clear measures,” including targeting coal and oil, according to The New York Times.

While Biden already banned imports of Russian oil to the U.S. weeks ago, there’s a chance he also will play a role in pushing European leaders to take a similar step. The president told reporters on Monday that he is “seeking more sanctions” in response to the images from Bucha and called Putin a “war criminal.”

Some experts, however, are uncertain of when that next shoe will drop – if it ever does.

“That's the big thing right now that's still on the table,” Coates says. “Russia is getting somewhere like a billion dollars a day in revenue from oil and gas. And Europe has said that they'd like to eventually stop those exports, but it's not clear how soon that will happen.”

Schott notes the multilateral conversations that recently took place in Brussels on “how to more quickly wean off of dependence on Russian oil and gas in Europe.” A plan put forward by the International Energy Agency – focused in part on liquefied natural gas – to reduce that dependency at least in the near term, he adds, really “would only offset about 20-30% of European imports of Russian gas.”

“There is talk of doing more, and that's in terms of buying less,” Schott says.

Russia has already tried countermeasures to get back at countries that have issued sanctions and to guard against any possible new ones. Putin recently demanded that European powers pay Russia in rubles for its oil, which led Germany to warn its citizens about potential gas supply shortages. Putin’s demand is likely an effort to prop up the currency’s value, even though it has been stabilizing lately. Russia could also push sales to countries that might be willing to buy at discounted rates, such as its ally China, which receives about 20% of Russian oil exports, according to the IEA.

But Schott notes that “there’s just too many things that Putin has done that are hurting or costing China” as a whole.

“Overall, the disruptions are having a negative effect on global growth and creating uncertainties in trade and financial markets,” he says. “That can't be good for China, which depends so much on the world economy and is the world's largest exporter.”

A next round of sanctions likely would not be limited to actions related to Russian energy. One possibility, simply, is for more countries to join the movement to take economic actions against Russia, Lowery says. Another would be to go more aggressively after major Russian financial institutions, such as SberBank, he notes. Countries could also go beyond freezing Russia’s Central Bank reserves and actually seize them, Schott adds.

What is more clear, however, is that the implementation, execution and alignment of the sanctions regime is “really important,” even if it’s not an easy job, Lowery adds, noting the possibility of loopholes and unintended consequences globally.

“Of course, since they’re unintended and we're in uncharted waters, I don't know where [the] Loch Ness monster is going to pop up,” he says.

Original source can be found here.