Just weeks after the war in Ukraine began, there has already a great impact on the economy worldwide. Westerm sanctions were applied to Russia, which caused a collapse of their currency, financial assets, and a significant increase in food and energy prices.
Trade in some Russian enterprises has stopped in cities like New York and London. Multiple international companies that used to be active in Russia are leaving, such as Apple, Shell, BP, and Norway's Equinox have all announced this week that they plan to end their ties with the country as well. In general, carmakers, retailers, and airlines suspended operations in Russia.
Global oil prices have also reached close to $115,00 per barrel since the beginning of the invasion to trade. Russian crude oil is trading at its biggest discount in more than 30 years and major global oil companies are abandoning operations in the country.
The conflict is directly impacting Russia's economic and banking system. Sanctions that were announced over the past week have cut off Russia’s two largest banks, Sberbank and VTB, from dealing in US dollars. According to the French finance minister, Bruno Le Maire, nearly 1 trillion dollars worth of Russian financial assets have now been frozen by sanctions. The President of the World Bank has told the BBC the following, “The war in Ukraine ‘is a catastrophe’ for the world which will cut global economic growth.”
Image Source: bbc.com
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