The Russian Ukraine crisis has affected the world economy in diverse ways. The conflicts’ shock to the global economy boosted inflation, slowed global economic development, and caused a food crisis. If the Russia-Ukraine crisis does not cease soon, global economic development may come to a halt.
The obvious effects
- Considerable impact on food production
Ukraine alone produces almost 10% of the world’s wheat and 16% of all corn. They produce 30% of the wheat, along with Russia.
The conflict between Russia and Ukraine may cause bread shortages in the Middle East and Africa, which rely on Ukrainian wheat and grain.
- Effect on global crude oil output
Russia is the world’s third-largest oil producer. They account for about 13% of global crude oil production. Following Russia’s invasion of Ukraine, crude oil prices rose to over USD100/bbl
- Effect on Natural Gas
Russia is the world’s second-biggest producer of natural gas and its largest exporter. Russia supplied 40% of Europe’s natural gas needs. The natural gas supply was considerably decreased after the war, resulting in rising crude oil and natural gas prices on the global market. This saw high energy bill prices all over the world.
- Cyberattacks have increased significantly.
Cyberattacks are a tactic employed by Russia against Ukraine in order to damage its administration and economy. Later, cyberattacks extended to other countries, including the United States. Russia is home to the most well-known criminal programmers, the majority of whom are state-sponsored.
- The Effect on Edible Oil
Ukraine is the world’s leading exporter of sunflower oil, accounting for about half of all sunflower oil exports. Sunflower exports were halted following the Russian invasion, and shippers were forced to find alternatives.
- Effects on global markets
Russia contributes over $1 trillion to global liquid wealth, of which approximately $300 billion is deployed in money markets. With the abrupt pulling of this percentage from global money markets, the stock market suffered volatility. The market’s volatility may have an impact on financial investors’ portfolios. However, it leads to a loss of investor trust and expenditure control. Meanwhile, cryptocurrencies have suffered as a result of the Russia-Ukraine conflict.