Sanction

A sanction is a government restriction that blocks trade, finance, or shipping with a targeted country, company, or individual, often applied to commodity exports as economic pressure.

A sanction targets a specific country, sector, company, or individual, cutting them off from part of the global financial or trading system without necessarily stopping all trade with that country outright. Commodity sanctions commonly block a country’s central bank from access to reserves, forbid its ships or insurers from operating internationally, or bar its oil and gas from being bought above a set price.

Sanctions reshape rather than simply shrink commodity flows: a sanctioned exporter typically keeps selling, but to a smaller set of buyers, often at a discount, and using a workaround fleet of ships and insurers willing to accept the legal risk. The sanctions imposed on Russian energy exports after Russia’s invasion of Ukraine are the largest recent example, redirecting crude oil cargoes toward buyers in Asia that continued to accept them. See sanctions and commodities.