Russian President Vladimir Putin was sworn in for his fifth term in office this week, even as his country is beset by sanctions, bogged down in a years long war in Ukraine and cut off from capital markets.
But Putin has found a series of workarounds that have helped bolster growth, funded his country’s war effort against Ukraine and worked to thumb his nose at the Western countries using economic sanctions to punish Russia.
“We are a united and great people and together we will overcome all obstacles, implement all we planned,” said Putin in a brief inaugural address this week. “Together we will win.”
The Russian economy is now poised to grow at a faster pace than any other G7 nation. Not surprisingly, the key to its economic success is oil.
After Russia invaded Ukraine, the West banded together to impose sanctions, curtail Russian energy exports and squeeze the Russian economy. And in many respects, it worked.
More than a thousand Western companies have left the country, according to a database compiled by Yale University. Over a million young, Russian men have fled the country rather than be drafted. Russian companies and banks are cut off from global capital markets and more than $300 billion in Russian central bank assets have been frozen.
But when it came to Russia’s much vaunted energy sector, there was a dilemma.
