Impacts of US Sanctions on Myanmar for the Commodities Market

(Aidan Miao and Satvik Deolal)

As the world closely observes the military coup in Myanmar, investors are right to worry about their assets in the region as situations are still very uncertain at the moment.

After the military overthrew the government and detained the elected leader, Aung San Suu Kyi, it triggered international condemnation and outrage as world leaders demanded the release of elected officials. US president Biden has threatened to impose sanctions, and other countries are likely to follow suit, considering many Western countries have already imposed sanctions on specific top military officials a few years ago for their involvement in the persecution of Rohingya people. If such sanctions are to take place in the near future, what are the impacts on the regional and global commodity market?

Speculations of possible actions against the Myanmar military are likely to target the two influential conglomerates, Myanmar Economics Holdings Ltd (MEHL), and Myanmar Economic Corporation (MEC). These two corporations have close ties with the military, whose executives are themselves military officials, and are often considered to be the general’s own firms. It is possible that the US might specifically target these two firms, forbid US firms from doing business with them, or it might go even further and try to restrict other foreign firms (such as Chinese investment in Myanmar) doing business with them as well. 

The two firms conduct a wide variety of businesses in oil and gas, jadeite mining, telecommunications, tourism, etc. Targeting them will most certainly directly penialize Myanmar military’s commander-in-chief, Min Aung Hlaing himself. 

It is possible the US might bring back sanctions on the jadeite trade which former president Obama lifted in 2016. The jadeite trade is an essential part of Myanmar’s economy but most of the trades around jadeite are not accounted for in the official GDP. According to Global Witness’s report, an international NGO, jadeite are mostly smuggled into China to avoid tariffs and the estimated values of jadeite trade are almost half of Myanmar’s GDP. Myanmar’s mining of jadeite is controlled by military elites and the US has previously sanctioned Myanmar’s jadeite trade until 2016, president Biden might bring it back this time.

The sanctions will have a direct impact on Myanmar’s oil and gas and jadeite production. The impact on jadeite might be minimal due to the biggest buyers of the gemstones being buyers from China, Hong Kong, and Taiwan, and most are smuggled illegally through the border, bringing back the US jadeite sanction might not be very effective. 

As for oil and gas, due to the secretive nature of the MEHL and MEC, their business records are hidden from the public and the degree of their direct involvement in the oil and gas industry is unclear. Therefore the direct impact on Myanmar oil and gas industry through sanctions on the two firms is unclear. 

Myanmar’s oil and gas industry attracts the highest amount of foreign direct investment in 2015 according to a study by the University of Yangon, and it has been growing rapidly in recent years after the election of a democratic government. An US sanction might set off a decline in FDI in the oil industry, as Mr. Biden had called the international community to pressure the military and said that he was “taking note” of those who do not stand against the military and support the Myanmar people. 

The biggest investors in Myanmar’s oil infrastructure are China and Thailand, and they started to invest in Myanmar before it had a democratic government. China’s state-owned oil company CNPC invested in Myanmar’s oil industry as early as 2001. While Western democratic countries might hold off their investment in Myanmar’s oil, fearing antagonizing the Biden administration after the US sanctions, whether China and Thailand will commit to “standing with the Myanmar people” is not clear. What we do know is that an US sanction will hurt Myanmar’s oil, but it might not cause the international market any damage. 

Myanmar is still an under-developed economy after almost five decades of isolation. Despite the recent rapid economic growth, it’s GDP is still one of the lowest among ASEAN nations.

Despite having oil and gas as the largest export, as indicated by the official data (jadeite might actually be the largest export if all is accounted for), Myanmar produces on average about 15 thousands barrels per day as of 2016, ranking 85th in the world. An US sanction that damages Myanmar’s oil industry is unlikely to have a significant global impact

Although a sanction on Myanmar is unlikely to cause significant global impact, it does not mean the US should impose sanctions that would wreak havoc on Myanmar’s economy and undo years of progress. Western leaders should retaliate and hold the military accountable, but at the same time preserve the country’s future economic potentials.


Sanction: A threatened penalty for disobeying a law or rule

Conglomerate: A company that owns other several small businesses.

FDI: A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. 

Coup: A coup d’état, often shortened to “coup”, is a removal and seizure of a government and its powers. Typically, it is an illegal, unconstitutional seizure of power by a political faction, the military, or a dictator.

Retaliate: To make an attack in return for a similar attack.


Paddock, Richard C. “Myanmar Military’s Vast Business Revenue Enables Abuses, U.N. Says.” The New York Times. The New York Times, August 5, 2019.

Lewis, Simon, Humeyra Pamuk, and Daphne Psaledakis. “Biden Threatened Myanmar Sanctions. What Are His Options?” Reuters. Thomson Reuters, February 2, 2021. 

Reed, John. “US Threatens to Impose Sanctions on Myanmar after Military Coup.” Subscribe to read | Financial Times. Financial Times, February 1, 2021. 

Fisher, Jonah. “Surprise as US Ends Myanmar Economic Sanctions.” BBC News. BBC, September 15, 2016. 

Pye, Daniel. “The Dark Shadow of Myanmar’s Jade Trade.” Financial Times, September 26, 2016. 

“Jade.” Global Witness. Accessed February 6, 2021. 

“Economic Interests of the Myanmar Military (16 Sept 2019).” OHCHR. Accessed February 6, 2021. 

“Myanmar Oil.” Worldometer. Accessed February 6, 2021.,reserves%20(as%20of%202016)

1. “Burma – Oil and Gas.” International Trade Administration | Accessed February 6, 2021. 

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