Latvian Researcher Criticizes the U.S. for Inconsistency and Assesses Russia's 'Pain Threshold'

In his opinion, the decisive factor in the current situation has been the U.S. decisions to impose sanctions on the oil companies "Rosneft" and "Lukoil," as they "hit the pocket" of one of Russia's key sources of income — the oil sector.

"The key question is how firm and consistent the U.S. position will be and whether real actions will follow the statements, including regarding companies from third countries," the researcher emphasized.

According to him, Russia will seek ways to adapt and will increase gray trade through intermediaries, including using the so-called "shadow fleet," which already today accounts for a significant portion of its oil exports, complicating the enforcement of sanctions.

The expert noted that the previous inconsistency of the U.S., for example, in tariff policy, may prompt market participants to wait and hope for a normalization of the situation.

Astukevichs noted that the effect of the sanctions will not be immediate, but will create additional financial pressure on the Russian budget. Russia's revenues from oil extraction have already decreased, and budget forecasts for this year have been revised downward. According to Astukevichs, the first results may only become noticeable in six months if the sanctions are implemented consistently.

Commenting on the potential impact of the sanctions, Astukevichs noted that "Russia's pain threshold has not yet been reached." In his opinion, for the Kremlin, continuing the war remains a priority, and the country is willing to endure economic losses for its continuation.

"However, in the context of serious economic upheavals, this calculation may change. It is difficult to determine the exact level of the Kremlin's 'pain threshold,' but it is clear that it is high, and the effect of the sanctions must be truly significant to reach it," he concluded.