Newsweek: How The West Should Respond to Putin’s Continuing Advance

How would the West react to a major escalation of the war in eastern Ukraine? What would Brussels and Washington do if Russia continues to send troops there?

Even though analysts often suggest arming Ukraine with defensive weapons, what people sometimes forget is that the West is still, by far, Russia's largest trade and investment partner. Current sanctions against Moscow only forbid the export of a limited number of services and technology to Russia—leaving most of Russia's trade with the West intact. In particular, they do not limit Russia's crucial energy exports to the European Union.

Dominating those exports is crude oil—not natural gas. About 40 percent of Russia's state budget consists of revenues from crude oil export tariffs, and less than 10 percent from natural gas. Moreover, the private income generated from oil exploration, drilling and transport comprises a large chunk of Russian industry, and is vital to the functioning of Russia's economy. Most of that oil and gas goes to EU markets through pipelines, as Russia has only a small tanker fleet and insufficient infrastructure to export large volumes of oil via the sea.

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