Four months into the Ukraine war, Russia is reaping bumper revenue from its oil and gas sales, but experts say Moscow should consider other heavily sanctions countries in recent history.
Iran and Venezuela, which have been hit with economic sanctions in the past, have not recovered.
The country's oil producers will be forced to cut output as a result of the sanctions. Russia's oil industry is likely to suffer from a decline in technological advancement as foreign investors pull out of the country.
Most of Russia's sanctions are imposed by the US, making them worse than Iran and Venezuela. He said that the US is not the only country that has restrictions on Russian trade, and that the UK has banned Russian oil imports.
Experts say that all of these factors point to a decline in Moscow's cash cow because of trade restrictions.
Iran and Venezuela have been hit by sanctions in the last few years, heralding what could happen for Russia.
Iran agreed to limit its nuclear program in exchange for sanctions relief from six world powers.
Iran's oil exports went from 2 million barrels per day in 2016 to a peak of 2.8 million barrels per day in 2018, according to data provided by the oil ministry. The number fell back after the US withdrew from the agreement and imposed sanctions. Iran's oil exports went from 300,000 barrels per day to 200,000 barrels per day after the move.
The supply-side of Russia's economy will most likely be impacted by the sanctions, according to a note written in March.
The US imposed sanctions on Venezuela in an effort to oust the president. As a result, Venezuela's exports fell to a 77-year-low of 623,600 barrels per day in 2020.
Russia's windfall in the current boom market is larger than that of Iran and Venezuela because of the sanctions against them. Oil prices have risen to 13-year highs due to an energy supply crunch not just because of the war, but as world demand is recovering from the swine flu.
According to an official document, Russia's economy ministry still expects oil production to fall in the next two years. Half of the country's crude oil went to Europe, according to the International Energy Agency.
Although countries like India and China have stepped in to buy Russian oil, it's not likely that Moscow will be able to find buyers for all the oil it sells to the EU.
Europe used to import a lot of crude from the rest of the world.
Russia's energy market boom won't last forever and a slowing of major investment into the country's oil industry will hit hardware in the long run, according to experts.
According to documents from state-owned oil firm Petroleos de Venezuela, the degradation of its oil infrastructure has already hurt the quality of the crude grades it exports.
The industry in Iran has been put into a state of chronic underinvestment due to the oil embargos. Javad Owji, the country's oil minister, said in November that the country needed $160 billion to upgrade and improve production to avoid becoming a net oil and gas importer.
If Russia's energy production declines to a point where it has to start imports, that could push up inflation and spill over into the rest of the economy.
The situation is already starting to play out in Russia as key software used in the oil and gas industry is becoming obsolete as companies exit the market.
The departure of Western energy firms from Russia will result in a lack of investment and trained staff.
While investors from China may step in at some point to fill the void in Russia's oil industry, it could take time as the Chinese are cautious about appearing overly supportive of Russia for fear of being caught up in secondary sanctions.
Even though Russia appears to have the upper hand, history shows that sanctions leave scars on the target country.
Russia may lose its status as a resource-rich country eventually.
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