Second Chances: Russia’s Economy is Bleeding But Putin Is Betting on a Win in Alaska 

Over the weekend, Russian President Vladimir Putin and US President Donald Trump agreed to meet in Alaska on Friday to discuss Russia’s war on Ukraine.  

Afterward, Russian officials and commentators “crowed about (Putin) landing a summit,” without making any concessions, wrote the Washington Post, noting it’s the first time the Russian leader has been invited to the United States since 2007.  

Russians saw it as a win.

“The symbolism of holding the Trump-Putin summit in Alaska is horrendous – as though designed to demonstrate that borders can change, land can be bought and sold,” Sam Greene, professor in Russian politics at King’s College London, told the newspaper, adding that the venue favored Russia, which owned Alaska until 1867. “Never mind that mainstream Russian discourse maintains a claim that Alaska should be returned to Russia.” 

Russia currently controls about 20 percent of Ukraine. Putin said this week that he would halt the war in exchange for obtaining Eastern Ukraine. Trump and other US officials have recently expressed an openness to the idea, one vehemently opposed by Ukraine. 

Meanwhile, European Union officials and the Ukrainians were visibly upset at being excluded from the summit, urging more pressure on Russia, such as sanctions. On Monday, EU leaders will hold an emergency meeting on the developing situation, with Germany warning the White House against any deal on Ukraine hatched “over the heads of Europeans and Ukrainians.” 

The US announcement of the meeting caught many off guard. For weeks, Trump, frustrated at Putin’s intransigence on ending the war, had been threatening new sanctions on Russia’s “shadow fleet” of oil tankers that ply the seas to bypass restrictions on selling Russian crude for foreign cash that fuels the war in Ukraine. 

That might be why Putin’s supporters are celebrating the upcoming meeting, analysts said, adding that such additional sanctions would deeply hurt Russia.  

As the Financial Times explained, while American companies must buy Russian oil at a fixed price of $60 per barrel and European Union countries must pay no more than around $50 per barrel, Indian and Chinese firms are purchasing oil above the cap, though still at a discount compared with regular prices. In that sense, the war has benefited Indian and Chinese economies as well as Russia. 

The ships might also be involved in other illicit activities, like shuttling munitions and other support to Libyan warlords, the International Consortium of International Journalists reported. 

These new sanctions were one sign of how American leaders were becoming increasingly hawkish about punishing Putin for starting the biggest conflict in Europe since World War II. While the causes of that war are still being debated in venues like Piers Morgan Uncensored, analysts told Times Radio that American diplomats are losing patience with Putin, who has been unwilling to engage in American efforts to end the bloodshed. 

Trump had given Putin until Aug. 8 to stop fighting, or China, India, and other countries that accept Russian oil would face so-called “secondary” sanctions, or levies on their trade with the US. 

Trump has already imposed 25 percent tariffs on India for their Russian oil trade, a rate that’s low compared with a 500 percent secondary tariff that Congress has proposed to punish Russia, the Hill wrote. Indian officials, who might now be able to cut off Russian oil, have so far rejected the US president’s efforts to alter their economic and energy policy, noted Breaking Points. Analysts at the Carnegie Endowment for International Peace warned that the tariffs would undermine US relations with India, the world’s largest democracy.  

Ukraine, unsurprisingly, has been lobbying hard for the US to enact the tariffs, according to ABC News. Still, Putin does not believe the sanctions threat will make much difference, Reuters added.  

They could hurt Russia, however, if the US enforces them stridently enough to convince more Chinese and Indian companies to opt for another supplier from the Middle East or elsewhere, argued the Kyiv Post. In that case, even a small reduction in Russian gross domestic product could impose great costs on Russia’s fragile wartime economy, Foreign Policy magazine added. 

The sanctions on the country are biting, too.  

For example, Russia has more potential agricultural land than anywhere else in the world but it has run out of potatoes, onions, and other vegetables, reported DPA, a German newswire. 

The shortages followed a spike in the price of potatoes in Russian shops, almost tripling within the last year. Meanwhile, the price of onions has doubled, and cabbage is now 50 percent more expensive than it was a year ago. 

Russian officials, meanwhile, say the country is on the verge of a recession.  

Since sanctions began after the country’s 2022 invasion of Ukraine, the Russian economy has grown despite the punitive measures, mainly because of war production and the country’s moves to replace imports, using money from the wealth fund and capital reserves in the banking system. But those reserves are now depleted. 

Still, there are always the oligarchs to turn to, observers say. 

Earlier this year, Russian officials, backed by the courts, accelerated appropriating the assets of rich Russians to fund their war. In March, the prosecutor general announced it had seized almost $30 billion in assets, not specifying a time period.  

In one such example, Russian authorities arrested one of the country’s most powerful oligarchs, billionaire Konstantin Strukov, as he sought to leave the country in July. That move had followed raids on his company, gold producer Yuzhuralzoloto, accusing the firm of violating environmental and industry safety laws – a pretext, say analysts, for confiscating all of Strukov’s shares, worth billions. 

“As the staggering costs of his war against Ukraine add up, exacerbated by harsh international economic sanctions, the Kremlin is stepping up implementation of a new funding method to help cover them: seizing assets from wealthy individuals, including longtime Putin loyalists,” wrote World Politics Review. “While authorities claimed to be targeting foreign-owned companies in an effort to nationalize strategic industries, that seems to be just a pretext to grab assets for an increasingly strapped economy….”