Effects of Ukraine war

Updated: 24-May-2022
Effects of Ukraine war

The Russia-Ukraine conflict, which began roughly a month and a half ago, is threatening world order stability. It examines the impact of the fighting on the Indian economy's embryonic recovery from the epidemic.

What effect has the conflict had on oil prices?

Russia is one of the invasion of Ukraine has caused Brent crude oil prices to rise as high as $130 per barrel, with prices now treading. Since the start of the war, crude oil prices have climbed. The worldwide impact of higher crude oil prices may have a spillover effect in terms of cost-push inflation.

The war has also disrupted India's edible oil sector.

The Reserve Bank of India's (RBI) February 2022 bulletin opens with the following statement: "Domestic macroeconomic conditions are striking a course that is deviating from global trends." Perhaps, but the probable outcomes of the geopolitical crisis that began on February 24 when Russia invaded Ukraine could call that judgement into question. That isn't everything. On March 8, US Vice President Joe Biden escalated the conflict by putting an embargo on the purchase supplies.

While the United States is not Russian oil—in 2021, an average of 672,000 barrels per day, or 8% of its needs, according Canada 51%; the impact would be felt abroad. CA skyrocket—to as much as $150 per barrel, according to some analysts—wreaking havoc..

Many commentators are concerned that the impact on India's economy would be severe; others are confident that India's economy is immune to the consequences of a distant war. The stock market has already responded, with key indexes down over 10% since February 1, albeit they rebounded around the time of the state election results. Several market veterans dismissed the decline, claiming that a "technical correction" was inevitable and that developments in Europe were the catalyst.

Most businesses and individuals are convinced – or at least hopeful – that the issue will be resolved swiftly, as the world cannot afford a protracted battle or continuous political turmoil in Europe. Nonetheless, have continued for a long time, and the global economy has responded. However, rising tensions over may increase the strain.

Three possibilities exist a difficult but doable short-term scenario in which the dispute is resolved and tensions de-escalate within two months, a second, more adverse scenario in which the effects of persistent sanctions are felt if the conflict lasts six to nine months, and a third, terrible scenario in which the conflict lasts 12-18 months.

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