Sanctions on Russia over its actions in Ukraine have compounded the impact of oil’s plunge but Moscow may have the financial buffers to hold out for two years without a change in policy.

European governments meet next week to review the sanctions, imposed after Russia annexed Crimea last March and threw its support behind pro-Moscow separatists in eastern Ukraine. The West’s response centred first on financial and travel restrictions on key individuals but by mid-year it had effectively cut off overseas funding to corporate Russia.

Although there was skepticism at the outset, these measures have hurt, particularly combined with the parallel collapse in oil, Russia’s major export. Their impact has far outweighed Russian counter punches to European agricultural imports or the cancellation of its South Stream gas export pipeline through southern Europe.

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