The Russian invasion of Ukraine, as in any war and geopolitical upheaval, will result in deaths to combatants and innocent civilians caught in the crossfire. It will push up prices in the global commodities market because of feared supply disruptions, especially on oil, wheat and corn.
The invasion will trigger a new refugee crisis as some Ukrainians flee for safety to neighboring Poland to avoid the war. Ukraine’s economy may also suffer once the European Union limits its ties to the Russian-occupied nation of 43 million.
Soaring oil prices are one of the knee-jerk reactions to the Russian invasion of Ukraine. Crude prices surged past $100 per barrel yesterday, the first time since September 2014, while commodities including wheat jumped on supply uncertainties from the two warring nations. Russia and Ukraine combined account for almost a third of wheat’s world trade. Ukraine, meanwhile, is the world’s fourth-largest corn exporter and accounts for about 22 percent of the global trade.
But the Russia-Ukraine crisis will not likely result in a region-wide conflict, with the Western powers opting to confine their response to sanctions against the invading country. The US and its allies have not committed themselves to intervene militarily to defend Ukraine.
Crude prices, which directly influence the cost of electricity and other commodities relying on oil-fueled transportation, will likely increase further. Russia is one of the world’s biggest oil and gas producers while Ukraine serves as the main transit route for Russian natural gas sold to Europe. Europe will immediately feel the impact of soaring oil and gas prices as the region looks for an alternative supplier elsewhere.
The Philippines, in the meantime, will have to brace itself for higher prices of oil and gas, which is used as fuel in some power plants. The Philippines, like many other nations still struggling to reopen their economy, will have to adjust to soaring commodity prices and literally conserve energy to tide it over until the Russia-Ukraine conflict subsides.
