The Impact of the Ukraine Conflict on the Global Economy and Energy Markets,

Ruslan Z. Nickolov, independent energy expert

The Ukraine conflict has created a new economic reality, highlighting the critical importance of resources over manufacturing, finance, and services. After the Russian troops rolled across the Ukrainian border, the West imposed the harshest sanctions any country has ever faced, both in terms of their number and intended impact. It has long been recognized that economic sanctions are a weak deterrent for governments resolutely pursuing their policies. The current situation is more nuanced though. Together with other dramatic events, above all, the COVID-19 pandemic, Russia’s special operation in Ukraine has opened a unique window of opportunity for resource-rich countries to influence the immediate future of the world economy that currently hangs in balance. […]

European consumers will also be paying hundreds of billions of euros in extra, often sub-optimal and otherwise unnecessary, capital expenditures and overseas LNG purchases, inevitably more expensive than Russian gas, given the already existing pipeline infrastructure. In addition, if the political push for the Net Zero energy transition is not tapered by the new reality (in fact, the opposite is quite likely), the lack of cheap Russian gas to plug the transition gap in the efficiency of “green” technologies will lead first to bringing back coal-fired and nuclear power generation and then to rushing in with more expensive half-baked “green” solutions. Obviously, this will make the achievement of the stated goals in the fight against global warming a lot more costly. Läs artikel