September 30, 2022
Global News

How effective is war in affecting global fuel prices?

  • April 18, 2022
  • 2 min read
How effective is war in affecting global fuel prices?

The war in Ukraine is expected to have a severe effect’ on the global economy

The Ukraine conflict isn’t just another insignificant, worldwide insignificant conflict that has been seen in recent years. This is a significant expansion in the aftermath of Cold War II, in which four of the revisionist powers four powers – China, Russia, Iran as well as North Korea – are increasingly contesting the world dominance of the United States and the western-led international order it established following World War II.

The conflict in Ukraine is likely to trigger a major supply setback for the world economy, which will reduce growth and accelerate inflation in a period when the expectations for inflation are unstable.

The impact on global business in the aftermath of Russian Ukraine War

  • Quantitative easing, also known as the buying of bonds in the market for sale was also utilized by a variety of emerging central banks in countries.
  • Many countries in the developing world have struggled to get back to their economic momentum following the recession of Covid-19 and now the war is creating major challenges. If this is the cause of tension, a fear of social unrest is now spreading.
  • The global crisis has shaken trust in the United States, just as the pandemic-related disturbances appeared to be easing.
  • The financial markets could become more chaotic if the United States proceeds with what some refer to as “the “nuclear alternative”: Cutting Russia out of the SWIFT payment network, which is a messaging service that connects thousands of banks and lets them transfer payments across the world.
  • The rising cost of food and energy can increase the pressures on inflation that central banks and policymakers are trying to reduce.
  • A move like this would deter Russia and prevent the transfer of profit from the production of energy, which accounts 40% or more percent of the country’s revenues. However, shutting Russia completely out of finance in the world might cause harm to U.S. and European companies who do business with Russian businesses.
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Kelly Johnson

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