The Ukraine-Russia conflict will require continuing prudent diplomacy and economic planning
Russia’s unprovoked assault on Ukraine, which completes six months tomorrow, came at a singularly inopportune time for a world recovering from the economic impacts of a global pandemic. The fact that the conflict shows no signs of ending is worse news as the global economy continues to lose momentum. Russia’s inroads into the east and south of Ukraine and it’s staying power against stringent Western sanctions and the arming of Ukraine with sophisticated weaponry have proven an unexpected dynamic. With predictions of an imminent Russian withdrawal and/or the overthrow of President Vladimir Putin proving premature, the prognosis is gloomy. At the center of the conflict is Europe’s ability to wean itself off its heavy dependence on Russian oil and gas, particularly the latter. The sharp spike in global fossil fuel prices immediately after the conflict offered a wake-up call on the long-term impacts. Now, though the prices have cooled somewhat, partly on account of subdued demand from a slowing global economy, the price of gas, which is used principally for heating, remains volatile as the European winter approaches.