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Experts fear longer term impact of Ukraine crisis & sanctions on Russia

Sanctions imposed by the US, the UK and the EU on Russia over Ukraine invasion are severe, with economic sanctions potentially impacting global economy, say experts.

February 25, 2022 / 03:39 PM IST
People inspect the consequences of Russian shelling in Kyiv, Ukraine, February 24. Russian troops have launched their anticipated attack on Ukraine. Big explosions were heard before dawn in Kyiv, Kharkiv and Odesa as world leaders decried the start of an Russian invasion that could cause massive casualties and topple Ukraine's democratically elected government. (Image: AP)

People inspect the consequences of Russian shelling in Kyiv, Ukraine, February 24. Russian troops have launched their anticipated attack on Ukraine. Big explosions were heard before dawn in Kyiv, Kharkiv and Odesa as world leaders decried the start of an Russian invasion that could cause massive casualties and topple Ukraine's democratically elected government. (Image: AP)

Alastair Newton, Alavan Business Advisory and Victor Abramowicz, Security Researcher, Curtin University, speaking with CNBC-TV18 on the United States and the European Union imposing sanctions against Russia over Ukraine invasion, said the sanctions are hard-hitting for Russia, and the economic implications of it on the world including India could be seen in the long run though not immediately.

Speaking on Russian President Vladimir Putin’s war of choice against Ukraine, Alastair Newton, said, it was uncertain how long the Ukrainian army could hold back a blistering onslaught by Russian forces, and termed the attack as “unprecedented".

“The unprecedented conflict not seen any time before. According to British intelligence, Russia has not met its first day objectives. And the general sense is it could roll back Ukranian forces despite stiff resistance,” said Alastair Newton.

On a question over the scale of this war and reacting on Russian forces advancing to capture Ukrainian capital Kyiv, he said, “Beyond some vague statements, we do not know what Russia’s military objectives are. The war should be over in a couple of weeks now.”

Further commenting on what Putin’s intention could be behind Ukraine invasion, he said, “It should be seen whether Putin is actually moving ahead according to his earlier statement that he wants to demilitarize Ukraine and not occupy. It should be seen what will be the longer impact of the sanctions and Russia’s possible retaliation for sanctions.”

Close

When asked whether US, UK sanctions on Russia if they have let Russia off easily, he said the ones the Biden administration have put together are really pretty tough. He said, “Sanctions imposed by the European Union are important. Sanctions come with close economic links. There is a sense that Russia has not been cut out yet. Bank sanctions imposed by the US on Russia are also paramount. Sanctions over technology and financial front are going to damage Russia’s economic growth prospects in the long run.”

The unified sanctions will force Putin to look to China for crude oil export, Alastair Newton said.

“Political implications are going be there. This will push Russia to open on China for its gas exports. Russia cutting gas supply to Europe a certain possibility. But Putin’s move to go away from Europe and move closer to China is not economically and politically sound. We have to look at these implications for the next 5 to 10 years. Markets have got this right,” the expert said, hinting the threat of sanctions forcing Russia to supply less crude or natural gas would have substantial implications on oil prices and the global economy

Highlighting OPEC members haven`t been meeting their production targets, Newton said, “A bit of over-reaction on energy prices now. We may see Iran coming to energy market again if sanctions are lifted. With 60 to 70 million barrels in their storage, in the next couple of weeks they could be supplied to different regions including India. Next week is going to be crucial. OPEC is currently going to stick with its supply now. Are Putin’s forces trying to suffocate Ukranian forces into surrender and enter Kyiv,”

Responding to a question on whether there would be severe economic repercussions for Europe and Russia and whether the conflict is going to be low for the other countries, Victor Abramowicz, Security Researcher, Curtin University, stated that the crisis will further accumulate and suppress world’s economic growth though in the long time

“This is going to impact the markets for longer duration. If Ukraine gets support from other countries, it is going to be long warfare, possibly for months and even years. Restrictions on trade with Russia is not going to have a direct impact on India. But it will rise to interesting situation,” Victor Abramowicz observed.



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first published: Feb 25, 2022 03:24 pm
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