Russian Oligarchs and Ordinary Citizens Feeling the Pinch of Sanctions

Ordinary Russians are preparing for a dramatic shift in their standard of living as their savings diminish in value and imports of everyday goods are quickly being cut off.

Already dealing with long lines at ATMs for cash, Russians are facing the prospect of shortages of basic goods. Two of the world's biggest container shipping companies, Maersk and MSC, stopped taking bookings from Russia except for food and medicine.

Analysts expect the country to ride out these challenges by promoting domestic substitutes of goods like cellphones and clothing while accepting high inflation and living off its oil revenue and national savings.

At the other end of the spectrum, Russia’s oligarchs are also being forced to pay attention to sanctions. Roman Abramovich, one of the better-known Russian oligarchs who is worth an estimated $13.5 billion, announced he is selling his globally-recognized Chelsea Football Club in what many say is a move to cash out before he faces sanctions.

Earlier this week, at least four superyachts owned by Russian billionaires with ties to Putin were spotted moving toward the Maldives, where there is no extradition treaty with the US.

What does this mean for me? 

While the impact on the standard of living of ordinary Russians will surely be high, what this all means for the global economy is yet to be fully understood.

Russia could throttle its oil and gas supply in retaliation to sanctions, forcing energy prices upward for the rest of the world. 

As we have already seen in the past year, high energy prices have a ripple effect on consumer prices and inflation.