The Worst Is Yet to Come for Russia’s Economy. 50-50 Odds on a Russian Bond Default.

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The Kasimovskoye underground gas storage facility, operated by Gazprom, in Kasimov, Russia. Russia is under unprecedented sanctions from much of the global economy.

Andrey Rudakov/Bloomberg

The West wanted to keep oil and gas sales out of its unprecedented economic sanctions on Russia. It’s not working.

Energy exports were meant to keep flowing, even as the U.S. and European Union cut off seven Russian banks from the Swift global payments system, and froze most of the Russian central bank’s foreign reserves. Traders and consumers of those exports aren’t sure they can thread this needle. “More than half the hydrocarbons originating in Russia are not settling,” says Mike Edwards, deputy chief investment officer…