It’s been forty days since Russia’s invasion of Ukraine. The condition of Ukraine is bad, it is not hidden from anyone, but the speed with which Ukraine is being destroyed, Russia’s treasury is also being emptied at the same speed. As soon as the war broke out, news started pouring in that the country was on the verge of poverty, the stock market had to be closed and the value of the Russian currency, the ruble, plunged into the abyss.
The war did not stop, but in the last one month the picture has changed again. The Russian currency Ruble has become the fastest growing currency in the world in the month of March. The ruble has gained 60 percent against the US dollar. Before the attack on Ukraine, a dollar was worth about 76 rubles, after the attack on 7 March its value reached 139 rubles, the lowest price of the ruble in history. But by the end of March, less than 82 rubles were needed to buy one dollar. As the war began, people were criticizing Putin by showing the ruble price, how he had slit his economy, but now most of these experts are sitting silent and watching Putin finally turn into disaster. How did you find the opportunity? This is interesting and important to understand.
With the war came worldwide criticism of Russia and attempts to force it to withdraw from Ukraine. Although none of the US or NATO countries directly came forward to help him in the war, but America and Western countries did try to put pressure on Russia by imposing various sanctions. But there is a hitch in this story and the issue is not minor. Russia is one of the largest exporters of crude oil and gas in the world. Its biggest buyers are the countries of Europe, which are partners in banning it. These countries know that they cannot survive without Russian oil. A sample of how oil and gas prices will rise around the world if the supply of oil from Russia is stopped, has been seen in the last one month. The price of crude oil, which was around $ 90 a barrel before the attack, began to run away quickly and reached $130. However, since then it has been fluctuating and as soon as the hope of the war is over, it has started hovering again around $100. But from this it is becoming clear that the price is not to be paid only by Russia, the whole world will have to pay it.
Russian President Putin also probably understands this very well. That is why he made a counter move in the face of economic sanctions. On the one hand, Putin had already instructed companies exporting from Russia to insist on taking 80 percent of their payments in rubles. Obviously, companies will have to persuade their buyers to do this, but these companies are under the influence of the Russian government, and by doing so, the demand for the ruble in the international market would also be created. He played a trump card over it. He made the condition that countries that are not friends with Russia, which are with NATO or America, now have to buy oil from Russia, then they will have to pay in rubles. Many big and small countries of the European Union that buy oil from Russia and they have long agreements for this. At this point of time, they neither want to look anywhere else nor pay the high price. This is the reason that since the time of sanctions on Russia, they had made it clear that despite the war and sanctions, they would continue to buy oil from Russia. The special thing is that oil and gas from Russia to Western Europe also goes through pipelines through Ukraine. If the snake dies and the stick does not break, this formula would have increased the pressure on Russia, but Vladimir Putin’s condition reversed the matter. Now the pressure is equal on both sides. If you don’t believe the ruble, then get the oil and gas from somewhere else.
However, experts feel that this too is more of a pressure strategy, because even at the time President Putin was warning that supplies would be stopped to non-paying countries in ruble from Friday, even at that time Russia’s big oil companies. The supply continued unabated. On the other hand, the governments of countries like Germany and Italy also seemed completely silent. He says that Russia’s conditions do not apply to his country.
There is also an aspect of this story ahead of the purchase and sale of oil, that the effect of this crisis is being felt all over the world. Russia doesn’t just sell oil. It is also a major exporter of wheat, maize, oilseeds, coal and many metals. It is the largest producer and exporter of palladium in the world. This is the metal, which is very important for making semiconductor i.e. computer chip. The world is already grappling with the shortage of semiconductors and now this war has increased the pressure. There are many such things, whose prices are constantly troubling the whole world and now instead of increasing the tension with Russia, it is seen in favor of ending the matter. Although the tide of nationalism is also visible within both Russia and Ukraine, but the rest of the world’s population wants to end the matter despite having opinions about right and wrong.
(These are the author’s own views)