N. Peter Kramer’s Weekly Column
Military analysts say Russia currently has too few soldiers on Ukraine’s borders to completely conquer and take over the country. Any rational politician knows that Putin might embark on an adventure that will have very serious consequences for his country and for himself. But how far will he dare to go in further invading Ukraine? According to reports the Russian soldiers are said to be on the ‘contact line’, the border between Ukrainian territory that belongs to Ukraine and the territory that the separatists have occupied since 2014. It is clear that the operation was prepared months ago. Recently more than 700.000 Russian passports have been issued to residents of the Luhansk and Donetsk areas, where roughly 4 million people live.
The conflict costs the Ukrainian state treasury at least two billion euros a month. President Volodimir Zelensky has said his country has lost millions in investments. But see, the European Union comes to the rescue and pumps billions in the corrupt Ukrainian economy. And what do the Ukrainians think about the conflict? A news website, Ukrinform, released a poll showing that less than 50% of the people are willing to strengthen the military or engage in non-military activities if a major war with Russia were to break out. A divided country.
Since the start in February, already-rising oil prices have jumped more than 10% amid tensions. Oil and gas prices climbed on fears the crisis will disrupt supplies across the world. Oil could go above $100 a barrel due to a combination of the Ukraine crisis and a serious lack of investment in oil and gas supplies around the world. The price of Brent crude oil, an international benchmark, touched already a seven year high of more than $99 a barrel after Putin ordered troops into Ukraine’s east.
What will be Putin’s answer on the new western sanctions on Russia? Russia is the second-largest oil exporter after Saudi Arabia and the world’s top producer of natural gas. Measures forcing the country to supply less crude oil or natural gas would have substantial implications on oil prices and the global economy.
