Russia’s invasion of Ukraine is forecast to have a negative impact on oil prices and the already-challenged global supply chain, while also sparking both higher inflation and sluggish growth.
So say experts looking at the military action, which began on February 23.
The JP Morgan company is reporting that if, as a result of the conflict, Russian oil exports are reduced, it would cause a dramatic spike in oil. In a report, the company estimates that the price of oil per barrel may reach $150 a barrel—the highest level in more than a decade.
The JP Morgan report additionally notes that “with a 12% market share, Russia is also one of the largest global oil producers.”
The war’s impact on the global supply chain may prove to be equally problematic, notes the website Axios, pointing out that Russia is the “world’s biggest supplier of palladium used in catalytic converters that scrub auto emission.”
Other trade may also be impacted by the military action, remarks the New York Times, observing that Russia is the largest wheat exporter in the world. Together, Russia and Ukraine comprise some 30% of global wheat exports, with Ukraine also exporting corn, barley, and vegetable oil.
How the conflict plays out on Wall Street, the paper added, is already being felt: “Whether you call it a correction or a panic attack, a stock market that was already becoming shaky has been roiled by Russia’s hostilities toward Ukraine.”
Adding another view on the crisis, U.S. News & World Report has published an interview with Robert Habeck, German vice chancellor, who predicts that the “complete West will turn away from Russia” because of the invasion.
“We will diversify our energy system, we will not buy Russian coal and gas in such an amount in the future,” Habeck added.
Russian President Vladimir Putin has charged that Ukraine has increasingly fallen under the control of what he called “extremists” threatening his country’s security. He has additionally described his country’s attack on Ukraine as a “special military operation” and not an invasion.
President Biden, in announcing sanctions against Russia, charged that Putin “wants to, in fact, re-establish the former Soviet Union. His ambitions are completely contrary to the place where the rest of the world has arrived.”
By Garry Boulard
