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Economic Impact of the War in Ukraine

Installment 3 by Emily Keaveney

The War in Ukraine has affected the global economy drastically, especially in the areas of energy, food, and humanitarian effort. Energy prices have risen since the beginning of the war, and the European Union has growing concerns about the security of the energy supply. Russia is a big supplier of energy and fossil fuel to the European Union, but since the EU’s stance on the war in Ukraine, Russia has suspended gas deliveries to several of the EU members (Impact of Russia's Invasion of Ukraine on the Markets: EU Response, 2022).

Since the suspension, the EU has tried to phase out its dependency on Russian fossil fuels. The goal is to ban nearly 90% of Russian oil imports by the end of 2022, although there will be an exemption for crude oil that is deliverable by pipeline. The EU is also trying to ensure that gas storage facilities are filled before the winter and can then share with members that do not own storage facilities. This way they are not as dependent on Russian gas and aim to reduce gas demand by 15% this winter (Impact of Russia's Invasion of Ukraine on the Markets: EU Response, 2022).

The war has had a direct effect on global food security and affordability. Prices for imports of maize, wheat, sunflower oil, and meal from Ukraine have increased due to Russia targeting Ukrainian agricultural facilities (Impact of Russia's Invasion of Ukraine on the Markets: EU Response, 2022). The EU believes Russia is solely responsible for the global food crisis and demands Russia allow the export of Ukrainian grain.

The EU also stressed the importance of reaching out to developing countries to counter Russian narratives in addressing food security issues. Ukrainian grain export stoppages have worsened world hunger as the grain has fed more than 400 million people across the globe. This grain export stoppage has led to mass starvation, as nearly 14 million people across Somalia, Ethiopia, and Kenya are already on the verge of starvation. This number is predicted to rise to 20 million if the war continues (Ukraine War: What Are the Impacts on the World Today? 2022).

In addition, there are many humanitarian aid issues regarding the nearly 7.8 million refugees in Ukraine. There are logistical challenges to crossing borders and airspace restrictions making it hard for refugees to flee Ukraine. There are a lot of concerns for the Ukrainian refugees as many of them are women and children who can easily be abused or exploited. Many feel as though traffickers are trying to exploit these women and children during this crisis. Women now have limited resources for health care, and children’s education has been interrupted (Ukraine War: What Are the Impacts on the World Today? 2022).

If the war continues down a long, drawn-out fight, then world hunger is only going to rise, along with the energy and humanitarian crises.



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