What is very clear is that Russia started the war and not Ukraine. Today, the war is taking place on the land and airspace of Ukraine and not that of Russia.
by N.S.Venkataraman
Russia started the Ukraine war, blaming Ukraine for it’s proposal to join NATO, which according to Russia would pose security threat for Russia. Subsequently, even though Ukraine said that it would not join NATO and NATO also confirmed that it has no proposal to admit Ukraine, Russia did not stop the war.
On February,24, Russia sent it’s troops to Ukraine under the guise of protecting the Russian speaking population there , especially in the breakaway regions of Luhansk and Donetsk. Russia recognised the independence of the separatist republics shortly before launching the military action on Ukraine.
What is very clear is that Russia started the war and not Ukraine . Today, the war is taking place on the land and airspace of Ukraine and not that of Russia. Ukraine is only defending its territory and Russia is clearly the aggressor. Therefore, the war has to be stopped by Russia and if the war were to continue , Russia is solely and fully responsible for the consequences such as global recession and food crisis.
While it is not clear as to what is the ultimate objective of Russia in conducting this brutal and ruthless attack on Ukraine , the ground reality is that Russia has significantly disturbed the global economy and forced several countries, particularly the small countries with weak economy , into a state of severe crisis
World cannot be without supply of essentials from Russia :
Russia is a dominant supplier of energy ( crude oil and natural gas) , wheat, fertilisers and several other products to the world. Therefore, the world is bound to get into a scenario of supply and economic crisis , if Russia were to stop the supply of essentials to the world market.
Energy supply :
Russia holds 80,000,000,000 barrels of proven oil reserves ranking 8th in the world and accounting for about 4.8% of the world's total oil reserves of 1,650,585,140,000 barrels. Russia has proven oil reserves equivalent to 60.4 times its annual consumption. Russia is the world’s third largest oil producer behind the United States and Saudi Arabia. Russia is the second largest crude oil exporter behind Saudi Arabia. Russian crude and condensate output is around 10.5 million barrels per day (bpd), making up around 12% of the world's total supply
Russia remains the second largest natural gas producer in the world , accounting for 17% of the global output.
Russia has oil and gas production facilities throughout the country, but the bulk of its fields are concentrated in western and eastern Siberia.
Agricultural commodity supply :
Russia is an important producer of agricultural commodities in the world. Russia is a net exporter of agricultural products, and play leading supply role in the global market of foodstuffs and fertilisers, Russia is ranked amongst the top global exporter of wheat, maize, rapeseed, sunflower seeds and sunflower oil.
Russia is one of the world’s largest wheat exporters. The country’s 2022 wheat crop , which is due to arrive this summer, is expected to reach 85 million tonnes. Russia has the potential to export 39 million tonnes of wheat in 2022-23 marketing season, which starts in July. Exports from Russia are crucial for the global wheat supply and demand balance.
Fertiliser supply :
Russia produces 50 million tonnes of fertilizers annually accounting for 13 per cent of the world's total output including potash, phosphate, and nitrogen-containing fertilizers, all of which are major crop and soil nutrients. Russia is the world's largest exporter of fertilizers, accounting for 23% of ammonia exports, 14% of urea export, 10% of processed phosphate exports, and 21% of potash export.
Metal supply :
Most Russian metals production is exported.. Its market share of total global exports of nickel is estimated at around 49% – palladium: 42%, diamond: 33%, aluminum: 26%, platinum: 13%, steel: 7% and copper: 4%. Russia accounts for only 4.4% of cobalt production, but despite this seemingly small share, it makes Russia the world's second largest producer of cobalt.
Russia cripples supply from Ukraine to the world :
Violating the sovereignty of a neighbouring country, Russia has attacked Ukraine relentlessly, killing thousands of innocent citizens , destroying tens of thousands of infrastructure facilities including port facilities and other vital installations. As a result, Ukraine has incurred more than half a trillion of dollars in losses.
Russia has crippled the Azovstal Steel Works in Ukraine for all practical purposes , which is the largest producer of metallurgical facilities in Europe producing 4 million tonnes of crude steel annually.
Ukraine is ranked amongst the top global exporters of wheat, maize, rapeseed, and sunflower oil. Ukraine is the most important producer of several inputs like neon to the world and the neon facility in Ukraine has now been forced to stop operations during the war.
As the supply source from Ukraine has considerably dropped now due to aggressive war by Russia , the world has become vulnerable to shocks and volatility of supply and price of vital agricultural commodities, fertilisers etc. The significant drop in supply from Ukraine of such agricultural essential commodities has resulted in food crisis in the world.
NATO’s compulsive need to contain Russia:-
NATO has thirty members in Europe and NATO claims that it is essentially a defensive arrangement for security.
Alarmed by Russia’s aggressive postures in Ukraine , NATO countries now feel insecure and think that Russia can repeat its Ukraine adventure on the NATO members also.
In such circumstances, NATO has decided that Russia’s aggression has to be contained and the NATO members clearly know that a military war against Russia is not an option for them. Therefore, NATO has imposed severe economic and sweeping sanctions against Russia to control Russia and force it to stop its aggressive action against Ukraine and possibly other NATO countries.
Recession and impending food crisis : Russia responsible
Sanctions against Russia by NATO and USA has now proved to be a double edged weapon
Russia is Europe's biggest oil supplier. 30% of the EU's petroleum oil import and 39% of total gas import come from Russia. For Estonia, Poland, Slovakia and Finland, more than 75% of their import of petroleum oils come from Russia.
Considering the high level of dependency for energy requirements on Russia, NATO members have now realised that they have no immediate alternative other than buying oil and gas from Russia. While some steps have been taken by NATO members to shift the source of procurement of crude oil to middle east or other regions to some extent, this option is not available with regard to natural gas . In such circumstances, the economic embargo on Russia by NATO members and USA are not making much impact on Russia’s economy as of now..
In April 2022, Russia supplied 45% of the EU's gas import, earning $900 million a day. In the first two months after Russia invaded Ukraine, Russia earned $66.5 billion from fossil fuel exports, and the EU accounted for 71% of that trade.
Now, Russia is insisting that NATO members should pay for crude oil and natural gas in Russian currency roubles and several NATO members are succumbing to this pressure.
The energy war between Russia and NATO members are continuing with really no perceptible change in demand supply scenario and transaction between Russia and NATO members so far.
An invasion into Ukraine by Russian troops on 24 February 2022 has as of yet not resulted in a loss of oil and gas supply to the market.
Price for crude oil nevertheless surged to around USD 110 per barrel following the expectations in the trade and speculative market that sanctions against Russia would cripple energy exports. It is currently unclear what the impact of sanctions will be on energy flows and if any supply losses will really happen
In the case of the agricultural commodity, Russia, which competes mainly with the European Union and Ukraine for wheat supplies to the Middle East and Africa, has been limiting its grain exports with taxes and an export quota since 2021 amid efforts to slow domestic food inflation.
Real shortfall in supply is happening as Ukraine has been hit hard by Russian forces, curtailing the export of wheat, gas and several other essential agri and non agri commodities from Ukraine. For example, India has been importing about 19 million litre of sunflower oil from Ukraine , which has now stopped ,causing severe supply constraint in India for sunflower oil.
Under the circumstances, the recession trend in the world and the impending food crisis can be avoided only if Russia would stop attacking Ukraine.
This war against Ukraine by Russia is justifiably condemned by most countries in the world but Russia does not seem to care about world opinion.
Obviously, Russian leadership assumes that Russia is a super power as far as energy and agi products and military strength , fertilisers and several metals are concerned and under no circumstances, the world can live without supplies from Russia.
In other words, Russia is guilty of causing global recession and food crisis, creating enormous problems for countries that are import dependent for crude oil, natural gas and agri commodities such as wheat, fertilisers, essential oil etc.
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