The Russian Ukraine war that started over a year ago has implications for the global economy. This especially affected countries that depended on Ukraine and Russia for oil, gas, and other commodities. On Ukraine’s part, they were unable to deliver their commodities to the outside world due to the ongoing war.
For the Russians, other countries refused their commodities in solidarity with Ukraine. While Russia in retaliation, refused to provide its commodities to the outside world. Furthermore, the trade route for both countries where external countries come to trade was closed off.
The Impact of the war
The war going on in Ukraine has negatively impacted the world economy, and it’s a cause for concern. One of the problems caused is the food crisis experienced by many nations worldwide. Not only that, there is inflation, lack of fuel, and increasing cost of living. This prompted EU member states to meet to help the countries impacted most by the food crisis.
The importation of goods was stopped
The movement of goods and people with the aid of various means of transport within Europe was never the same. There was no free movement, and people were scared of passing through war and military zones. In fact, crossing the border and boarding planes was difficult. Therefore, importers couldn’t transport goods by sea, air, or land. Examples of goods that stopped moving are fuels, and commodities like grains, wheat, and so on.
The influx of Ukrainians into member EU countries
Additionally, refugees from Ukraine fled Ukraine to seek refuge in tiger European countries. This increased the number of populations in those countries they moved to. Consequently, these countries had to provide for their stay, food, and shelter, thereby, increasing their budget and spending. But some of these countries were struggling before the refugees came. Hence, the addition of new people poses an economic problem to them, further escalating the cost of living.
Russia suspended its gas delivery
Following its declaration of war, Russia suspended its gas delivery. Hence, prices of energy have increased in the EU and all over the world since mid-2021. Fuel prices further increased when the war between Russia and Ukraine started. And Russia’s continued attack on Ukraine caused a lot of issues concerning energy security in the EU states. This has given rise to Russia’s continued suspension of gas delivery to various EU states.
As a result, it escalated the issues on the ground. Even when countries friendly to both Russia and Ukraine asked Putin to stop the war, he didn’t listen. And likewise, Ukraine’s stance to defend itself is like Ukraine’s badge of bravery to defend and protect its people.
Fixing oil prices during the Russian Ukrainian war
Around December last year, the committee decided on setting an oil price cap during the Russian Ukraine war. This was set at $60 per barrel for petroleum, crude oils, and other derivatives that come from Russia. Such a price cap gears toward lowering price hicks caused by extraordinary market situations. Also, it will decrease the proceeds they get from oil after unleashing such raids on Ukraine.
Why this is important
The price fix will bring stability to the energy price worldwide. In addition, it’ll mitigate adverse effects associated with supplying to other nations. Last month, the councils concluded on adding measures to further cap the prices of oil. These measures are called two-price caps for petroleum derivatives that fall under Russian origination or exports.
European Union’s rejection of Russian fossils
The European Union decided to stop relying on Russia for fuel in early 2022 to stop the Russian Ukraine war. It was around that time many nations stopped buying fuel from Russia. Then two months after, the EU placed a 90 percent ban on oil imports from Russia before the year 2022 ended. However, crude oil delivery through the pipeline was exempted from the ban.
In addition, the members of the Union stated terms and conditions to:
- Improve the efficiency of energy.
- Accelerate renewable deployments.
- Diversify the routes and sources of energy supply.
- Improve electricity and gas network interconnections.
Other helpful measures
EU member states showed solidarity by accepting Ukrainians into their countries and providing effective countermeasures. They established information and transport centers at the major borders. They also provided transport to facilitate human movement. The transport ministers in the European Union were helpful. They exchanged their ideas on the effects the war has on Ukraine and the world. These ministers further supported the EU’s decisions to help Ukraine.
How the measures helped EU members
The effect of Russia’s war with Ukraine is huge, especially on national food sustenance and affordability. However, the EU is not majorly affected because of some policies on agriculture that make food and feed available. The self-sufficiency nature of the EU makes it easy to rise to the challenge and ensure food security for habitats.
In summary, the Russian Ukraine war is proof that war is never a good thing. It destroys lives and properties and destabilized many things, including displacing people from their homes. The lives of the people involved would never remain the same again.