Russia's invasion of Ukraine is ushering in an economic crisis for Putin: report
Photo via Sergei R./AFP

Sanctions have been applied to Russia off and on, starting after the annexation of Crimea in 2014, but after the invasion, harsher sanctions were applied. The Wall Street Journal reports that they might finally be putting a massive squeeze on the Russian economy.

February marked the one-year anniversary of the war against Ukraine, and with it, the prices of oil and natural gas have surged around the world. For a time, that meant that Russia could increase its own costs of oil and gas, making a more significant profit.

"Those days are over," the report said. "As the war continues into its second year and Western sanctions bite harder, Russia’s government revenue is being squeezed, and its economy has shifted to a lower-growth trajectory, likely for the long term."

The Journal cited Alexandra Prokopenko, a former Russian Central Bank official who abandoned his country after the invasion.

IN OTHER NEWS: Trump supporter arrested outside Manhattan courthouse after pulling knife

"Russia’s economy is entering a long-term regression," he warned.

While global inflation after the pandemic has been a serious problem, the high costs of products generally traded with Russia has sent food and fuel in Europe to soaring prices.

Still, NATO has held strong, and Russia's biggest exports, oil and gas, lost large customers.

"Putin considered Germany too dependent on Russian energy, too weak militarily, and too business-minded to mount any significant resistance to his war. He was wrong," wrote Council on Foreign Relations expert Liana Fix and Caroline Kapp.

ALSO IN THE NEWS: Ted Cruz gets chided at Senate hearing after blowing up on Biden’s DHS chief

The ruble is down over 20 percent against the dollar in the past five months. The military draft has resulted in over 22,000 Russians fleeing to the United States, revealed the latest US Customs and Border Protection data. The draft also means that young people are being pulled from the labor force and sent to war, which is starting to impact businesses.

"There is no sign the economic difficulties are bad enough to pose a short-term threat to Russia’s ability to wage war. But state revenue shortfalls suggest an intensifying dilemma over how to reconcile ballooning military expenditures with the subsidies and social spending that have helped President Vladimir Putin shield civilians from hardship," the Journal explains.

Properties are being seized from Russian oligarchs and quickly driving yachts to islands that refuse to implement sanctions.

“There will be no money next year, we need foreign investors,” said Russian raw-materials billionaire Oleg Deripaska this month.

The meeting between Putin and China's Xi Jinping is further evidence that Russia is increasingly dependent on China. Now that Putin has stashed nuclear weapons on the border of a NATO country, China might face more pressure from the global community about aligning itself with a country ready to start a nuclear war.

Read the rest of the economic analysis in the Wall Street Journal.