The White House admits there will be knock-on effects from the penalties, sources say

The US administration has reportedly admitted that any new round of anti-Russian sanctions would inflict serious damage on both the global and the US economy, but that it doesn’t see it as a sound reason to give up on the move.

New sanctions would be introduced despite the potential damaging impact for the US and its Western allies in the event of a military conflict with Ukraine, several officials from President Joe Biden’s administration have told CNN.

Washington has previously accused the Kremlin of planning an invasion of its neighbor in January, which the Kremlin has rejected as “fake news.”

Reports cite at least two analyses carried out by the Treasury and State Departments in recent weeks that found the sanctions against the Russian energy giant Gazprom and the country’s Central Bank could be catastrophic – and not just for Russia. If introduced, the penalties would reportedly cripple economies across the world by potentially spiking gas prices or hampering European trade and investment with Russia at the worst period for the bloc.

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The negative effects could reportedly boomerang back onto the US during what would be an election year. The unnamed officials also expressed concern over potential cyberattacks against US and European critical infrastructure.

Washington has accused Russia of being behind a number of previous cyberattacks. Earlier this month, the FBI placed a Russian man on its wanted list for allegedly having launched ransomware forays worth millions of dollars against numerous victims, including businesses and government entities. In April, the US announced sanctions against Russia in response to what it described as cyberattacks and other hostile acts, but Moscow has denied all the allegations and pledged to respond in kind.

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Nonetheless, a senior administration official has been citing as saying, “any costs that we would bear will pale in comparison to the impact we generate on the Russian economy and financial system”.

The US, along with a number of its partners in Western Europe, has been threatening Russia with unspecified ‘devastating’ consequences should it launch military action in Ukraine.

The potential penalties may allegedly include targeting major Russian commercial banks, sanctioning Russia’s energy sector, blocking Russia’s access to bond markets, cutting the country off from the SWIFT international payment system, and tightening export control measures.

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