Russo-Ukrainian Conflict and its Global Consequences

The remnants of the Russia-Ukraine war has been scathing and long lasting. It has been an ongoing war, raging since February 2014, over 8 years ago. At this time, Ukraine’s Crimean Peninsula was ‘occupied by unmarked Russian forces, and later annexed by Russia’ (Wikipedia Contributors, 2022). This conflict for control over eastern Ukraine engaged the Ukrainian and Russian military, marking the beginning of the Russo-Ukrainian War.

 

Further down the line, we reach February 2022, where conflict and war-like behaviors escalated, resulting in the war that currently occupies newspapers and news channels worldwide. Vladimir Putin, president of Russia, ‘unleashed the biggest war in Europe since World War Two’ (BBC, 2022), with the explanation that ‘Western-leaning Ukraine was a constant threat and Russia could not feel “safe, develop and exist” ’. Additional reasons were provided, stating that he aimed to ‘demilitarize and de-Nazify Ukraine’ (Kirby, 2022) in order to protect the Russian people from what he established as ‘8 years of bullying and genocide by Ukraine’s government’.

 

As of August 24 2022, 5587 Ukrainian civilians have been confirmed dead, with the actual number presumed to be in the tens of thousands. This war has left a huge mark on Ukraine, with its citizens having to pay the price, further resulting in huge numbers of refugees fleeing from the country ( > 6.6 million). Not only has this decision to inflict war resulted in the death of nearly 9000 Ukrainian soldiers, but an astonishing 25,000 Russians are said to have been killed too (Yuhas, 2022)

 

Consequences

 

Not only has this immense decision impacted both Ukraine and Russia, it too has impacted the majority of countries worldwide, and the global economy. All over the European Union, the invasion has had a huge impact on ‘the mobility of people and goods across all modes of transport’ (Consilium, 2022). Impacting global supply chains, impeding the flow of goods, inducing dramatic cost increases, supply chain shortages, and food shortages, are just a few among the list of consequences prompted by the war

 

However, the most substantial complication created has been the fuel shortage, resulting in a major increase in fuel prices, drastically increasing uncertainty about the recovery of the global economy. ‘Russia is the world's third-biggest oil producer, behind the United States and Saudi Arabia, accounting for about 12% of global production’ (Dean, 2022). Additionally, 40% of Europe’s gas too came from them, and due to Europe’s high dependence on Russia, they had great power in determining Europe’s ability to progress. As Europe began imposing sanctions on Russia for invading Ukraine, in retaliation, they began steadily cutting off the supply of this crucial substance. Fuel is not only used for cars, but is used to ‘heat homes, generate electricity, and power industries, leading energy bills across Europe to become very expensive’ (Liberto, 2022).

 

With low supply and continuously rising demand, a shortage is induced causing prices to rocket, and throw Europe’s economy into a deep recession, with no hope to prevent it.

 

How did the world react?

 

On 15th and 16th July 2022, the G20 finance ministers and central bank governors met for the third time under the Indonesian G20 presidency. Prior to this, the G7 nations had argued that ‘Russia shouldn’t attend their meetings so long as the country is in violation of international law’, with the U.S Treasury Secretary, Janet Yellen, stating ‘Russia's actions are not the actions of a government that upholds international norms and laws. Representatives of the Putin regime have no place at this forum’ (Treeck, 2022). However, the current holder of the G7 presidency, German Chancellor Olaf Scholz, said ‘all G7 leaders would attend the G20 summit in Indonesia’.

 

During the meeting, Yellen made clear her intentions by welcoming Ukraine’s finance minister and mentioning her belief that ‘Russia is solely responsible for negative spillovers to the global economy, particularly higher commodity prices. (Straits Times, 2022). Many top officials from Britain, the United States, and Canada have been walking out during G20 meetings during speeches from Russian representatives. They have further been speaking out against Moscow’s war in Ukraine, condemning further action and acknowledging the unprecedented challenges arising due to the conflict.

 

Due to Indonesia’s presidency, the actions taken by this nation have been more on the side of calling ‘for cooperation to overcome headwinds slowing global growth’ (Hermes Auto). They believe that reducing conflict is of number one importance to maintain the peace, and ‘in order for us to be able to recover together… we need more and even stronger cooperation’ (Hermes Auto), specifically from the G20. They hope to allow the G20 to remain as a forum for nations to be able to talk about and discuss their issues, hopefully resolving them through utilizing a resolution beneficial to all.

 

Finally, the proposal to boycott Russia arose. As the world has been attempting to reduce the quantity of Russian oil consumed, Russia has proceeded to counter this by raising prices, allowing them to maintain their overall revenue. However, on June 4th, European governments (the EU) ‘announced a worldwide ban on the provision of maritime insurance to vessels carrying Russian oil’ (Dempsey et al.). US officials are concerned that this ban may push up prices rapidly, through an immediate surplus of Russian petroleum products in the market. The EU’s ban remains in place, with the purpose to ‘make it particularly difficult for Russia to continue exporting its crude oil and petroleum products to the rest of the world, since EU operators are important providers of such services’ (Eliassen). Since June, the White House has been working to support G7 countries in producing a price-cap mechanism that would allow some ‘Russian oil to reach third countries as long as they agreed to pay a below-market price for the cargo’ (Dempsey et al.). This ban not only forces other nations to comply due to their need for maritime insurance but also ensures Russia is unable to continue increasing its prices to maintain its revenue.

 

How have China and India been affected by that treatment? Which side will they take - Russia or the G7 (UN)? 

 

India and China, currently the key beneficiaries of Russian oil during this crisis, have not been affected as deeply by the increase in Russian oil prices as other nations have been. As Western nations seek to scale down their reliance on Russian energy, these countries continue to buy cheaper, discounted Russian Oil, whilst the other G20 nations continue to try limiting the quantity consumed (Menon). Prior to the Russia-Ukraine conflict, India was known to rarely use Russian oil, however, they have now ‘emerged as Moscow's second-biggest oil customer after China since Moscow's invasion of Ukraine’ (Verma). 

 

This has been entirely unexpected for the rest of the G7 members, as whilst Canada, Japan, the US, the UK, and other nations continued to impose sanctions on Russia in order to ‘cripple its financial system’, China and India, countries with the largest populations, continued to buy its commodities. Not only have they seemingly chosen to side with Russia to continue benefiting their own country, but their actions further result in detrimental impacts, undoing any work done by the other nations.

 

Many believe that India has chosen to buy larger quantities of Russian oil due to its ‘economic expediency’. Biswajit Dhar, professor at the Center for Economic Studies and Planning at Jawaharlal Nehru University said ‘In a situation where inflationary pressures and shortages of fertilizers were upsetting all calculations, the Russian supplies came in handy’. Furthermore, these other nations continue to hope that India and China instead choose the side of the UN over Russia. As Yellen continues to push for a price cap on Russian oil, she hopes that ‘China and India would see it was in their interest to participate’ in ensuring the restriction of Russian revenue (Reuters).

 

The G7, alongside the rest of the world, have become increasingly aware of Russia’s current reliance on India and China’s consumption of its commodities, feeding the world's eagerness to get these two large nations on their side. However, despite their trials, China and India feel the need to maintain their relationship with Russia and ensure their ties are strong. According to Zhai and Roy, they see their ‘close relationships with Russia as a necessity, even as Russia’s forces have faced some of their biggest battlefield setbacks’. Due to these strong stances, future predictions suggest that though their consumption of Russian oil seems to be reducing, they are unlikely to switch sides soon. This is not only due to China’s view of seeing Russia as a strategic partner ‘in its escalating rivalry with the US’, but also due to India’s reliance on many of Moscow’s commodities, including over ‘half of its military supplies’ (Zhai and Roy).

 

This has become an increasingly worrying topic for the west as if these three major superpowers of the world band together, they may be undefeatable during times of conflict and war. In specific, the relationship between China and Russia continues to grow, and this has been recognised by other nations worldwide. Daniel Russel, who served as assistant secretary of state for East Asian and Pacific affairs in the Obama administration said ‘as their respective relations with the United States worsened, the two governments increasingly form a united front to oppose the U.S. across the board,’ said Daniel Russel. Though Chinese leaders have raised concerns about the conflict, as well as called for negotiations to end the war, the capital, Beijing, has been stated to have not undergone any changes in its view of its relationship with Moscow.

 

Possible Solutions

 

As we’ve concluded, China and India are the two major beneficiaries of Russian oil, consuming a large portion of what is currently being produced by Russia. The UN continuously works toward getting these nations on their side, hopefully putting a cap on the production of Russian oil, and restricting their ability to finance the war, possibly putting an end to the ongoing conflict. However, they have run into many roadblocks whilst doing so, as India and China still continue to consume Russian oil. In the case of China, many have lost hope in the ability to persuade them to shift, as the alliance with Russia continues to get stronger (as mentioned above). 

 

On the other hand, I believe decreasing India's consumption of oil from Russia may be a more realistic target for the UN. Currently, Russia is one of India's largest defense suppliers, producing a large proportion of the military ware they use. “According to a 2020 working paper by the Stimson Center, 70% to 85% of India's military platforms are of Russian origin” (Christophe). This may pose an obstacle in preventing them from switching providers as they may be worried about Russia reducing their supply of military. Additionally, India may feel ‘safer’ on the side of Russia, as incase there is an outbreak of war, India can receive high quality military equipment from Russia, which they may not have otherwise.

 

Due to all these current barriers, the G7 nations may have to implement changes in order to obtain the support of India., I believe that in order to persuade them, the US or European nations, especially those within the G7, may be required to satisfy the military needs of India. Through meeting the defense demand of this nation, they may be able to reduce India’s reliance on Russia, further allowing them to switch oil suppliers to another country and promote the G7 nations and their goals.

 

Conclusion

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As both Russia and the West continue battling to get India and China on their sides, the Russian-Ukraine war continues to rage on. It is widely believed that both superpowers are wary about the conflict, and would hope for a cease-fire over a global war. I believe, though both nations are currently siding with Russia, in the case of heightened global conflict India is more likely to stay neutral, whereas China may side with Russia as they have their own agenda, whereby they would require an ally in claiming back ‘ownership’ of Taiwan.

 

However, we are still left wondering what side India and China would actually choose.