An explanation for Joe Everyman, curious about what sanctions are, how they work, who pays first, and why “withhold wheat” is usually the wrong mental model.
Evidence. Incentives. Consequences.
People talk about sanctions like they’re a switch.
Flip it: Russia suffers.
Flip it harder: Putin caves.
Flip it hardest: peasants starve.
That last one makes a dramatic movie.
It’s also usually the wrong mental model.
Sanctions aren’t “we stopped selling you wheat.”
Sanctions are: we made your money scared to move.
And when money gets scared, everything else gets expensive, slow, and sketchy.
Let’s use Russia as the example, because it’s the cleanest case study of how modern sanctions actually work.
1) What sanctions are (in one sentence)
Sanctions are government-made obstacles designed to raise the cost of bad behavior by restricting money, trade, technology, and access.
They come in two main flavors:
- Targeted: people, banks, firms, specific sectors
- Broad: whole-country restrictions (the blunt instrument)
With Russia, the West has mostly tried to do this:
Cripple the war machine and elite money flows… without openly declaring war.
That’s the theory.
Reality is messier.
2) The 3 levers that make sanctions work
Forget the headlines. The machine runs on three levers:
Lever A: Money (banking + payments)
This is where U.S. sanctions punch above their weight.
Why?
Because the world still runs on:
- dollars
- correspondent banks
- clearing and compliance
- and the fear of getting blacklisted
So even if a deal doesn’t happen in the U.S., the payment often touches the U.S.-linked financial system.
That’s why the scary part isn’t “America won’t trade with you.”
It’s:
“Anyone who trades with you might lose access to the global financial bloodstream.”
That’s a whole different kind of pain.
Lever B: Movement (shipping + insurance)
Modern trade is not just “ship goes from A to B.”
It’s:
- ship + insurer + port services
- charter + brokers + compliance checks
- paperwork + payment rails
Sanctions can make shipping legally risky and financially uninsurable.
A ship that can’t get insured is a ship that makes everyone nervous.
Lever C: Machines (technology + parts)
This is where sanctions quietly grind capability down over time.
Export controls and tech restrictions don’t always create instant shortages…
…but they can stop:
- advanced manufacturing tools
- aerospace parts
- chips and high-end electronics
- “dual-use” components (civilian + military)
It’s less “boom.”
More “rust.”
3) Who gets hit first (and who gets hit anyway)
Sanctions are sold as “targeted.”
Sometimes they are.
Common first-wave targets:
- oligarch money
- big banks
- defense suppliers
- energy financing
- shipping / procurement networks
- senior officials and entities tied to the regime
But here’s the part nobody prints on the brochure:
Even targeted sanctions can spill into civilian life because they:
- raise costs
- kill credit
- spike inflation
- make imports harder
- turn normal trade into black-market gymnastics
So who gets hit anyway?
- small businesses that relied on imports
- airlines that can’t easily service aircraft
- consumers who pay more for tech, medicines, parts
- workers in sectors that lose financing and customers
Sanctions aren’t a sniper rifle.
They’re a tangle wire field.
Elites may have cutters.
Regular people walk into it barefoot.
4) The wheat question (your “peasants starving” example)
Here’s the key: food is usually not the main target in modern sanctions.
In fact, many sanctions frameworks include humanitarian exceptions for food and medicine.
So why do people still worry about starvation?
Because exemptions don’t fix the real choke points:
- banks refuse the payments (even if it’s legal)
- insurers won’t touch the shipment
- shippers avoid risk
- ports and brokers don’t want the paperwork headache
That’s called over-compliance.
It’s the “fear tax.”
Russia-specific reality check
Russia is not typically framed as “dependent on U.S. wheat.”
And Russia is also a major exporter of wheat and fertilizer—meaning the bigger global fear is often:
If Russian exports get tangled, food prices rise elsewhere.
So the “withhold wheat and peasants starve” story usually misses the real dynamic.
If you want a sharper summary:
Sanctions rarely starve a country directly.
They increase friction until the whole economy feels like it’s running in wet sand.
5) Oil is the money hose (so sanctions aim there)
With Russia, energy is always central because:
- it’s a massive revenue stream
- it funds the state
- it funds the military
- it funds patronage networks
But even energy sanctions often aim for pressure, not instant collapse.
One modern approach used in recent years is the idea of a price cap style mechanism:
- Keep oil flowing enough to avoid a global shock
- But reduce the revenue per barrel
- Use shipping/insurance leverage to enforce it
This is sanctions logic in its purest form:
Don’t stop the car.
Just make gas expensive and hard to buy.
And yes—targets often route around it with gray networks, middlemen, and improvised logistics.
Sanctions become a cat-and-mouse game.
6) “Secondary sanctions”: why the whole world obeys
Here’s the part that makes U.S. sanctions feel like gravity:
Secondary sanctions mean the U.S. can pressure third parties:
“If you do certain business with our target, you may lose access to the U.S. market or U.S. financial system.”
Even companies that don’t “love” U.S. policy still tend to comply because:
- losing dollar access is a corporate heart attack
- reputational risk is real
- banks don’t like surprises
- insurers don’t like headlines
This is why sanctions often work through fear more than force.
Sanctions aren’t always about what’s illegal.
They’re about what’s too risky to touch.
7) Who can impose sanctions, and who can lift them?
Does the President need Congress?
Often, no.
A lot of U.S. sanctions are imposed through executive authority (commonly under IEEPA, after declaring a national emergency tied to foreign policy/national security threats). Treasury/OFAC then enforces the program.
But Congress isn’t irrelevant.
Congress can:
- mandate sanctions by law
- limit or shape sanctions
- require certifications/conditions
- control funding and oversight
Who decides when they get lifted?
Depends on what kind they are:
- Executive-order / emergency-based sanctions: the President can often modify/lift by ending the emergency or changing the order and regulations.
- Congress-mandated sanctions: lifting usually requires meeting statutory conditions, using waiver authority, or Congress changing the law.
Are there lobbies around sanctions?
Yes.
You’ll see pressure from:
- industries losing markets (energy, agriculture, manufacturing, shipping, finance)
- allies who take economic blowback
- humanitarian orgs pushing for workable exemptions
- security hawks pushing for tighter enforcement
Sanctions policy is never “just morals.”
It’s always morals + money + geopolitics + domestic politics.
Cop Rules takeaway (the simplest truth)
Sanctions don’t usually work like “no wheat, peasants starve.”
They work like this:
- Freeze key people and firms
- Scare the banking system
- Complicate shipping and insurance
- Deny technology and parts
- Pressure revenue streams like oil
- Wait while friction turns into cost, and cost turns into political pain
Sanctions are not a guillotine.
They’re a vise.
And a vise doesn’t care who yelps first.
Exhibits
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