Right now the world was trying to recover from the economic loss suffered during the Corona period. Russia’s military action against Ukraine in February has increased the concern of the entire world. Many countries have directly opposed it.
Apart from this, many companies and agencies tried their best to force Russia by closing their services in Russia. But this war is still going on continuously. Its biggest impact is being seen on the world economy.
From rising oil prices and falling stock market, it can be inferred that if the war is not stopped, the crisis is going to increase in the future. In this article we will tell you what impact this war has had on the world economy.
fuel prices increased
The biggest impact can be seen on crude oil. Oil prices are continuously increasing. This is the first time since 2014 that the price of crude oil has crossed $100 per barrel.
Apart from this, many European countries are heavily dependent on Russian energy. This especially concerns the supply of gas through several important pipelines. Even if the conflict ends, it is likely that harsh economic sanctions on Russia will make it very difficult for these countries to be able to import gas.
Meanwhile, oil prices rose again last week after sanctions on Russian banks disrupted supplies. At the time of writing the article, the price of oil is $ 105 per barrel. Let us tell you that Russia exports 6.5 million barrels of crude oil a day. Apart from this, its share in natural gas production is 17%.
traffic affected
This war is also likely to create problems on the transport side. This mainly includes sea shipping and rail freight. This is going to have an impact on the total freight movement between Asia and Europe. Many countries of Europe use sea ships and rail networks for trade. But the war will affect it, when the freight charges of railways and ships will increase. Countries like Lithuania are expecting their rail traffic to be severely affected by the sanctions against Russia.
impact in supply chain
Since the pandemic, companies were working towards production as per customer demand. But the war has had a bad effect on it. Increase in oil prices, low production, price rise, and delay in transportation of goods from one place to another, etc. are some of the factors that are creating hindrances.
Lack of edible oil and other ingredients
Let us tell you that Ukraine alone makes almost half of the sunflower oil exports. If the war continues like this, there will be problems in production. Which will affect exports.
More than 70 percent of India’s crude edible oil demand is met through imports. Ukraine and Russia account for 30 percent of world exports of wheat, 19 percent of corn, and 80 percent of sunflower oil. This food item is exported to many small and poor countries.
Bad condition of auto sector
There is a possibility of huge loss to the automobile sector due to this war. After Coronavirus, there was a shortage of semiconductors and chips. Now the crisis is likely to increase further after the war. In addition, several companies have permanent factories in Ukraine that manufacture car components for automakers.
Apart from this, stock prices are falling and there is a possibility of increase in unemployment and hunger. The closure of operations by SWIFT has affected Russia’s foreign exchange investments as well as trade with other countries.
