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Europe correspondent Nick Dole in London

Vladimir Putin’s plans to freeze Europe melt away with warm weather, as his economy withstands bracing winds

While Europe's record-breaking temperatures have been causing alarm among climate scientists, officials in the Kremlin may be equally dismayed.

The mercury shot up to historic January highs in eight countries, with Warsaw recording 18.9 degrees Celsius, despite the average for this time of year normally being just 1C.

Temperatures also soared in the Netherlands, Liechtenstein, Lithuania, Latvia, the Czech Republic, Denmark and Belarus.

Russia had hoped a long, cold winter would generate high demand for its gas, pushing up prices and strengthening its hand in Ukraine.

The president had threatened to cut supplies to Europe, so a freezing winter could have put the continent at his mercy.

However, by the end of 2022, gas prices had fallen back to pre-invasion levels and Russian pipeline exports to Europe had plunged to volumes not seen since the 90s.

Multiple explosions on the Nordstream pipelines connecting Russia with Germany cemented the situation.

Western world leaders initially blamed the Kremlin for the attacks, while Moscow has accused the UK Royal Navy of sabotage, which the government in London denies.

In September last year, a leak in the Nord Stream gas pipeline caused bubbles to appear in the Baltic Sea.

Despite the fall in gas export problems, Russia's economy appears to be doing better than expected.

While it is forecast to contract by 0.8 per cent this year, the Kremlin's coffers have been cushioned by the high prices customers paid for commodities throughout most of 2022.

Western nations hope that could soon change.

Sanctions are biting, but not hard enough

After Ukraine was invaded in February 2022, western leaders moved swiftly to enact sanctions, promising Russia's economy would be decimated.

The sanctions were wide-ranging, imposing curbs on Russia's financial system, its oil and gas exports, luxury imports and certain individuals.

Tom Keatinge, founding director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute, said shrinking Russia's war chest was never going to be a fast process, due to the country's resources.

"It's just a fact of life that we are going to continue funding the Russian war machine for the foreseeable future," he told the ABC.

"But we must do everything we possibly can to restrict that.

"Things like the oil price cap are clearly welcome as a next step down the road to reducing the amount of income Russia earns."

The oil price cap, which was agreed by G7 countries and Australia, prohibits buyers from paying more than $US60 per barrel for Russian oil.

And it prevents insurance and shipping companies from getting involved in shipments that breach the ban.

Since the policy came into force in December, the price of Russian oil has fallen 20 per cent.

Countries like China and India are not abiding by the cap and are still buying Russian oil, but it's being offered at discounted prices in order to attract buyers.

Mr Keatinge said even countries that don't support Russian sanctions will not pay more for commodities than they have to.

"What the oil price cap has done is place restrictions on Russia through countries that don't back the sanctions," he said.

To balance its budget, the Kremlin needs Russian oil to sell for about $US70 per barrel.

It's been trading closer to $US50 in January and unless that improves, Russia's war chest could be constrained.

However, Moscow has already shown it is willing to raid its national wealth fund to fill any shortfalls.

So, to apply even more pressure, some EU countries including Poland, Lithuania and Estonia will argue for an even lower price cap when it's reviewed in the coming weeks.

Russia exploiting 'gaps in the system'

Russia's been hit by multiple rounds of western sanctions, targeting individuals, financial markets, banks, imports and exports.

They are designed to curtail Russia's weapons production and increase pressure on Vladimir Putin's regime.

However, Mr Keatinge said they're far from perfect.

"There are lots of gaps in the system," he said.

He pointed to financial centres like the United Arab Emirates as well as countries like Turkey, South Africa and India, which are still providing "tremendous services" to Russia.

"I think 2023 is going to have to be about cajoling those countries to realise that it is not in their interests to provide the sort of facilitation and sanctions-evasion services to Russia," he said.

Mr Putin has said Russia's economy was proving resilient.

"The economic situation is stable," he told Russian state television on Sunday.

"Much better than not only what our opponents predicted, but also what we forecast.

"Unemployment is at a historic low. Inflation is lower than expected and has, importantly, a downward trend."

Gulnaz Sharafutdinova, professor of Russian politics at King's College London, said the sanctions have also had little effect on societal resilience in Russia.

"We've seen quite a creative adaptation of the Russian economy and Russian society," she told the ABC.

Russia thwarts sanctions with secret imports, knock-off brands

Western nations hope that by banning Russia from buying computers and semiconductor chips, they can prevent the production of high-tech weaponry.

However, Professor Sharafutdinova said Russia had still been able to access goods via third countries, like Armenia and Kazakhstan.

"Russian businessmen go to [there] and bring [back] telephones, computers or monitors," she said.

"So all these things are brought back to Russia and sold despite the sanctions."

There are also common household appliances, such as washing machines, within Russia that can provide certain components needed to manufacture weapons.

The US government says washing machine and refrigerator parts have been found in Russian weaponry recovered in Ukraine.

But sanctions are starting to impact some industries, particularly areas not related to the ongoing war effort.

Russia's car industry collapsed by nearly 60 per cent in 2022 due to a lack of components and its famous Lada brand even stopped fitting some vehicles with airbags.

The aviation industry is also feeling the weight of sanctions, with national airline Aeroflot now reportedly stripping old planes for spare parts.

Many of its airliners are manufactured by US firm Boeing, or Airbus, which is based in Europe.

Meanwhile, hundreds of western brands that left Russia appear to have been replaced by suspiciously similar local brands.

The void left by McDonald's, which permanently left Russia in May after 30 years, has been filled by a fast-food chain called Tasty.

Other knock-offs have been less creative, with Cool Cola replacing Coca-Cola and Star Coffee in place of Starbucks, complete with similar colour schemes.

While the West described the exodus as "the end of an era", Professor Sharafutdinova said the withdrawal of brands wasn't shifting public opinion as much as some in the West might have hoped.

"For those for whom it was very important to go to Zara and to buy McDonald's or … Starbucks, [they'll] be affected by it," she said.

"But putting it into scale: your country and victory … as opposed to going to McDonald's or to 'Tasty' — that will not make a big difference."

She said the mobilisation of young Russian men was doing more to shift people's views.

"People are losing their children or their brothers or their husbands," she said.

"They have that sense of loss and … that the war is not going anywhere. That the victory is unachievable. That the state and the army are in some ways impotent.

"And so, the faith in quick victory has dissipated."

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