Russia and Ukraine are currently in a conflict as the world watches on the sidelines to see the possible outcome. There are no clear winners in this war and even if externalities are looked at, the world economy is going to feel some pain.
Russia and Ukraine are both important to the world economy and more so Russia. It has the largest landmass for any country and is resource-rich.
At the moment, even if Russia does win the war, the geopolitical landscape will probably change in Europe and more so the world for a long time. Russia and Ukraine combined contribute to a third of the world’s wheat exports, a fifth of its corn trade, and approximately 80% of sunflower oil production, according to the US Department of Agriculture.
If Russia decides to attack Ukraine and the rush shuts off Russia from their world, Russia might turn east and we already see that with various political partnerships, especially China. Having Russia linked with China is a geopolitical disaster as China is watching from the sidelines and carefully studying the implications.
It should be noted that Russia and China have a hot and cold relationship, from a geographic point of view, they still share border issues. There has also been fallout from the past. To see them closely tying up loose ends is frightening.
Oil and gas is another problem that might affect Europe if they decide to blockade Russia from their world. Russia supplies over 40% of its energy resources to Europe, which is a lot and is a bit irresponsible from the strategic point of view for Europe to get closely tied to Russia, which is often an unpredictable country.
Europe would be cold for a period of time and the implications are hard to predict. Russia is still keeping the valve on and supplying energy to Europe as of this writing but things can change in a heartbeat given the current level of escalation.
The western world is slowly shutting down the curtains on Russia from many different facets. If Russia decides to do the same, no one will win.
The poorer class is already facing pressure on their currency due to inflation which has been a boogeyman over the last couple of months. If Russia decides to pull its curtain, things could get really interesting.
