Oil and gas revenues have been Russia’s most important source of income, accounting for up to half of the total Russian budget over the last decade. Despite severe sanctions imposed by the West to curb Russian energy income following the Russian invasion of Ukraine, Moscow’s oil revenues don’t seem to have been significantly affected.

Watch the video above as Straight Arrow News contributor Peter Zeihan explains why it has been so challenging to take Russia’s energy exports — and associated profits — offline.

Excerpted from Peter’s July 3 “Zeihan on Geopolitics” newsletter:

Despite most countries in the West wanting to rid themselves of any involvement with the Russians, the oil revenues continue to flow into Russian pockets. So why haven’t Western countries dropped the hammer on Russian oil exports?

Russian oil accounts for roughly 10% of the global energy supply. If you take that away, everyone in the world is going to feel the heat (or lack thereof). No leader, especially a U.S. president, is willing to bite that inflation-causing bullet.

This boils down to one thing, is the fallout worth it? If the U.S. severs ties to global energy markets, that could cause a global crisis or depression, and even fracture the Western alliance. Not ideal. Enforcing a Russian oil ban could lead to escalation and military involvement… also, not ideal.

In a perfect world, ties to Russian oil would have been cut long ago. But we’re not learning our ABCs here, these are major decisions that could drastically change the trajectory of the world as we know it.