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But as Furman noted, Russia’s oil and gas exports are significant to the world.
The European Union imports about 80% of the natural gas it uses, according to the US Energy Information Administration, and Russia accounts for 41% of the natural gas imports and 27% of the oil imports in the continent, according to Eurostat.
Compounded with energy prices in the EU surging from 20 euros to 180 euros a megawatt-hour over the past year, the disappearance of those gas and oil imports could spell disaster for the region and the interconnected global economy. Meanwhile, in the US, gas prices have hit a seven-year high, climbing to about $3.50 per gallon on average, while inflation over the past year has grown at its highest rate in 40 years, at 7.5%.
On the other hand, Ukraine has also been a major supplier of grain to other regions, sending 40% of its wheat and corn exports to the Middle East and Africa, The Times reported.
In response to a potential food crisis in those regions, US Secretary of Agriculture Tom Vilsack said on Saturday that American farmers would increase production and “step in and help our partners,” The Associated Press reported.
Ukraine accounts for 12% of the world’s grain exports and is estimated to provide 16% of global corn exports this year, the AP reported. Vilsack told the outlet he believed that American consumers would largely be unaffected but that Europeans would face “a different story.”
“You have to look at the backdrop against which this is coming,” Gregory Daco, the chief economist for consulting firm EY-Parthenon, told The Times. “There is high inflation, strained supply chains and uncertainty about what central banks are going to do and how insistent price rises are.”
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