For the past three weeks, the media has been covering the conflict opposing Russia to Ukraine. Indeed, the undeniable crisis between the two states has reached its peak as of February 24th 2022.
As most of the world's population doesn't inhabit the Russian nor the Ukrainian soil, we might be tempted into thinking that such conflict is more or less far away from us. Is that really the case, i.e. is the Russia-Ukraine conflict really far away from us?
This article will not only aim to answer these questions, but it'll also explain how this crisis will most likely affect the entire world. What consequences will follow such geopolitical crisis?
Shortly after Russia invaded Ukraine, the international community i.e. the United States of America, the European Union and Canada amongst others, have issued a number of sanctions against Russia. Such sanctions are:
Some Russian banks will be deprived of the usage of the Swift system, which is the main international financial messaging platform. Such sanction will result into delaying financial transfers across borders, including the Russia's exportations income.
Financial assets of Russian banks abroad have been frozen, as well as in its central bank. Some Western countries have totally excluded Russian banks from their financial systems.
Wealthy Russia citizens, including but not limited to Russian President Vladimir Putin and Russian Foreign Minister Sergei Lavrov, have had their assets frozen in some Western countries.
Energy related sanctions
25% of the European Union's oil, along with 40% of European Union's gas is sourced from Russia. The European Union is seeking to find alternative energy suppliers in order to reduce its dependency on Russia by year 2030.
By stating that he is "targeting the main artery of Russia's economy", Joe Biden's United States of America is aiming to ban all oil and gas imports from Russia, by the end of year 2022.
Germany is seeking to suspend the operation of the Nord Stream 2 gas pipeline.
Media related sanctions
The broadcasting of news outlets such as Russia Today and Sputnik has been suspended from the European Union, as the European Council claims that such channels, directly or indirectly controlled by the Russian Federation, are tools for disinformation, information manipulation and distortion of facts used by the Russian government.
Such restrictive measures will be carried on until the Russia-Ukraine conflict is put to an end and until the disinformation claimed to be conducted by the Russian government ceases.
Consequences of these sanctions are expected. Some of them are slowly unravelling, such as some counter sanctions implemented by the Federation of Russia against the Western countries. These sanctions and the conflict will most likely result into:
Increase of the price of oil barrels
Sanctioning one of the world's biggest oil producers will have an impact not only on the cost of an oil barrel, but also on the word's global economy.
Indeed, the price of an oil barrel will be increased, as there will be an increased demand on other oil producers. This will lead to an increase of price not only from oil refiners, but also from oil distributors and from gas stations.
The price of oil also impacts the global economy as most of the items on the markets are transported by oil-based transportation means. Therefore, if there is an increase of the oil price, the cost of everything else will also increase.
Increase of gas prices
40% of EU's gas is sourced from the Federation of Russia. If sanctions and / or counter sanctions are enforced, gas related bills, such as heating systems, will likely increase substantially.
Furthermore, such gas is transited through Ukraine, thus making Ukraine the keeper of the second largest gas reserves in Europe. This conflict will definitely impact such reserves, which will result in affecting the stability of the inhabitants of Europe.
Increase of the price of our basic products for alimentation
Basic products for alimentation are likely to have a price increase not only because of the oil price increase, but also because Russia and Ukraine are big producers of the world's wheat, corn and sunflower oil, amongst others.
Over 400, 000 tons of sunflower have been blocked in Eastern European's ports for the past weeks. If they are not released, it is safe to assume that the cost of sunflower oil will soon increase, as well as the costs of home meals, restaurants meals and meals from take away outlets.
Ukraine is amongst the world's top 5 corn exporters. Combined, Russia and Ukraine produce one fifth of the world's corn. This geopolitical crisis will surely affect the cost of corn based products, such as corn flakes, corn flour, etc.
Regarding the wheat production, Russia is the world's biggest producer of wheat. Indeed, 20% of the world's wheat is produced by the Federation of Russia. Furthermore, Ukraine is responsible for 10% of the world's production of wheat.
Western countries' food is mainly made of wheat. As Ukraine and Russia produce 30% of the world's wheat, it is safe to assume that such crisis will affect food products we hold dear such as bread, pasta, cakes, etc.
Although the biggest world's population is neither living in Russia nor in Ukraine, one can easily understand from the above that this conflict is very likely bear undesirable effects in our daily lives.