The attacks have practically interrupted navigation in Ukraine, a country where agricultural production is massive, especially corn and wheat. Russia and Ukraine are also major suppliers of metals and other industrial products, while Russia is one of the largest oil and gas producers in the world.
The invasion not only has ramifications for political stability in Europe and around the world, but it also strains a global economy already weakened by inflation, rising energy prices, the COVID-19 pandemic. 19 in progress and a tight supply chain.
This is how Russia’s attacks on Ukraine and the resulting consequencesof the West, affect Americans and people around the world. To learn more, see our articles on How? ‘Or’ What and where to find .
Oil and gas prices on the rise
Russia’s invasion of Ukraine sent global energy prices soaring, with crude oil surging above $105 a barrel on Thursday for the first time since 2014. The price fell a little later Thursday and Friday, and is currently around $92.50 a barrel, according to OilPrice.com.
By AARPthe average U.S. gasoline price on Saturday was $3.60 a gallon, up slightly from $3.57 on Friday.
Russia is one of the world’s largest producers of crude oil and natural gas, supplying about 40% of gas in the European Union. Western sanctions could affect access to this supply, particularly with Germany shutting down the Nord Stream 2 gas pipeline which was to bring natural gas from Russia to the EU via the Baltic Sea.
Friday, Democratic Sens. Jack Reed, Sherrod Brown and eight others urged President Joe Biden to help lower gas prices by releasing oil from the Strategic Petroleum Reserve, a deep underground storage complex along the Gulf Coast holding approximately 600 million gallons of crude.
According to Reuters, Biden is currently working with international leaders to release oil from global strategic reserves. In one Thursday press briefing announcing economic sanctions against RussiaBiden said, “My administration is using the tools — every tool at our disposal — to protect American families and businesses from rising prices at the gas pump.”
Russia is the largest exporter and second largest producer of palladium, a metal used in cellphones, car exhaust systems, fuel cells and even jewelry and dental fillings. Rising prices for palladium and other critical metals could lead to price increases for manufacturers and ultimately consumers.
“We could see a new surge in inflation,” Christopher Miller of the American Enterprise Institute told the New York Times.
Stock market volatility
As news of the Russian invasion broke, global stock markets took a hit: The Dow Jones Industrial Average fell 830 points on Thursday morning, while the Nasdaq fell around 1.5% and the S&P 500 fell 2.5% in early trading.
The U.S. stock market rebounded on Friday, with the Dow Jones rising nearly 835 points for its biggest gain of the year, and the Nasdaq and S&P 500 also recovering from Thursday’s losses.
In Europe after the invasion, the German DAX index fell by 4%, and Asian stock markets also fell, with Hong Kong’s Hang Seng losing 3.2% on Thursday morning. China’s Shanghai Composite Index fell 1.7%, while the smaller Shenzhen Composite Index lost 2.36%.
Russia’s main stock market, the MOEX index, hit a record high on Thursday, falling more than 35%, or more than $150 billion in value, Bloomberg reported. The MOEX suspended trading on Thursday morning, according to the Wall Street Journal. On Friday, the MOEX rebounded, gaining 20.04% at 2,470 points, according to Russian news agency TASS.
On Friday, Germany’s DAX, France’s CAC 40 and Britain’s FTSE also all posted strong rebounds from Thursday.
The US Departments of Treasury and Homeland Security have both sounded the alarm over potential cyberattacks on US banks, hospitals, government offices and power grids in retaliation for sanctions on Moscow.
On Thursday morning local time, the websites of the Ukrainian cabinet and the ministries of foreign affairs and education were all experience disruption.
Herbert Lin, senior fellow at Stanford’s Center for International Security and Cooperation, told Rachel Gutman of The Atlantic that the Russians have elevated cyberattacks to an “art form”.
Although U.S. banks have beefed up their defenses, Lin added, utilities in major cities could be more at risk as they lack additional funding for cybersecurity.
Lin discouraged a panicked response from ordinary Americans, but said having extra cash and a duffel bag might not be a bad idea. He stressed that these elements should still be in place regardless.
Rising food prices
Food prices have already risen in the United States and abroad, and the impact on wallets could worsen with the Russian invasion.
Ukraine is one of the top five corn exporters in the world, exchanging some 35.9 million metric tons in 2019 alone. Protracted open conflict would likely lead to higher prices in Europe, not only for corn itself, but also for related products including cooking oil, corn syrup and baby food. the cattle.
Soy price have also surged in the United States in recent months, following an exceptionally poor harvest in South America. If U.S. farmers have to make up the difference between corn and soybeans, which are competing for land, prices for both crops will likely rise in the U.S., as will the cost of packaged goods made with them.
Russia is the world’s largest wheat exporter, a crop that Ukraine also exports, commodity economist Arlan Suderman told MarketWatch. Together, the two nations account for almost a third (29%) of the world’s wheat trade.
“A protracted military conflict that disrupts trade could make much of this wheat unavailable to the export market,” Suderman said.
The United States is not dependent on Russian wheat – Egypt, Turkey and Bangladesh are the biggest importers – but the disruption in trade could affect world prices for flour, pasta, bread, pizza and other products. other wheat products.
At the Chicago Board of Trade, wheat futures jumped 5.7% Thursday was just over $9.34 a bushel, the highest price since 2012. Soybean prices also climbed to a nine-year high, while corn rose to an eight-month high. Rates on all three futures began to contract, with overnight losses between 2% and 3%.