Speaking at a Moscow event in early October, Russian President Vladimir Putin sounded cocky about the sanctions imposed on his country by Washington and its European allies. The penalties, Putin said, were “utter silliness” that would only hurt Western businesses.

But now that Russia’s economy is rapidly imploding, with oil prices plunging and the ruble collapsing, Putin is the one feeling the pain. And the question already being debated in Washington is whether President Barack Obama’s strategy of economically sanctioning and isolating Russia deserves any credit.


“It’s hard to disaggregate out the independent effects of the sanctions from the bigger story. Obviously the driver is oil prices,” said Obama’s former ambassador to Moscow, Michael McFaul.

“That said, there is no doubt that sanctions raise uncertainty about the Russian economy. Their own minister of economic development said today that the ruble is falling faster than the macroeconomic indicators would suggest it should be,” McFaul added.

Republicans, who have long maligned Obama’s policy as too timid, were more skeptical. “I think it’s a pretty hard sell to say that the sanctions strategy on Russia is what is tanking the ruble right now,” said a senior congressional GOP aide.

“The impact of sanctions is absolutely marginal in this story,” added the aide.

Though the cause is disputed, no one disagrees that Putin’s economy is in crisis. On Tuesday, the Russian ruble fell nearly 6 percent in value — and is down by nearly half since Putin’s Oct. 2 comments. The price of oil, on which Putin’s economy relies, has plunged by about a third. Trying to stem the damage, Russia’s central bank has cranked up interest rates to a whopping 17 percent. Still, analysts see little relief ahead for a Russian economy in a spiral that recalls a 1998 crash that required massive international aid — and which rocked Moscow’s political leadership.

“We couldn’t imagine what’s happening in our worst nightmare even a year ago,” Sergey Shvetsov, a senior Russian central banking official, said in Moscow on Tuesday.

Even so, Obama remains cautious in his approach to the Russian leader. On Tuesday, the White House said Obama would sign new legislation passed by Congress authorizing additional sanctions on Moscow, along with military aid for Ukraine, despite his “concerns” that it could upset European allies nervous about a boomerang effect for their own economies. (Obama can waive the new sanctions, though administration officials would not say whether he will.)

And in public, Obama officials are humble about the role of sanctions imposed by the West since Putin’s annexation of Crimea in March. The crisis in Russia is “not due solely to sanctions,” State Department spokeswoman Jen Psaki said Tuesday. “It’s more complicated and involves oil prices and general economic mismanagement in Russia.”

Privately, however, Obama officials and allies take clear satisfaction from Putin’s plight and are more willing to claim credit.

“We’re seeing a toxic cocktail for Putin and Putinism,” said a senior administration official. “The sanctions highlight the economic and geopolitical cost of the foreign policy choices that Putin has made. It has made clear that he is an unpredictable actor on the international stage, and markets react to that as much as governments do.”

While conceding the role of global oil prices and general “economic mismanagement” by Putin, the official said that sanctions have fueled a credit crunch as key Russian lenders find themselves cut off from foreign financing at a moment of stress for major Russian businesses.

“It took a little time … but if you look at the economic indicators in Russia now, it’s clear Putin miscalculated,” said a Senate Democratic aide.

Even as Putin’s economy reels, however, there is no sign that he is ready to cry uncle in eastern Ukraine, where Obama officials say Russia has conducted a low-intensity conflict for several months.

And some analysts say that’s why Obama shouldn’t take too much satisfaction yet. “If the purpose of the policy is to hurt Putin, then absolutely — Obama deserves credit,” said Ian Bremmer, president of the Eurasia Group. “But I think the purpose of the policy is to help the Ukrainians.”

The U.S. has demanded a withdrawal of Russian personnel and equipment and the closing of Ukraine’s border with Russia, among other things. But, said the administration official: “We’ve seen nothing on that front.”

Some analysts doubt that even an economic crisis will change Putin’s behavior in the near term. McFaul noted that, while downplaying the financial crisis, state-controlled Russian media has depicted it as “a Western plot — a plot to bring about regime change.”

In late November, Russian Foreign Minister Sergei Lavrov made the point explicitly: “The West doesn’t want to change Russia’s policies. They want a regime change,” Lavrov told a Moscow think tank, according to the pro-Kremlin English-language outlet RT. Lavrov made similar remarks on Tuesday.

Putin “fundamentally believes this is about undermining him. He doesn’t think it’s about eastern Ukraine,” McFaul said, making it unlikely that Putin will see a settlement in Ukraine as a way out. “I think we’re going to be in a prolonged stalemate,” McFaul said.

That’s why conservatives are urging Obama to deliver more arms to Ukraine. The bill Obama has agreed to sign provides $350 million for military equipment that includes anti-tank and anti-armor weapons, although it does not mandate their delivery and Obama may not actually send the arms.

“The question is whether Ukraine can raise the costs on Russia to where eventually the Russian leadership says, ‘it’s not worth it,’ ” said the congressional GOP aide. “And to be crass, I think that’s measured in how many Russian body bags are coming back from Ukraine.”