The Ukraine War is about to get worse

Amid the never-ending coverage of the latest offensive or counteroffensive in Ukraine, it is often unappreciated just how much worse the global economic repercussions from the conflict could have been. Russia is the world’s leading exporter of gas and provided around 50% of the EU’s demand before the war; Ukraine, meanwhile, is a major exporter of grain, alongside Russia itself. The complete disruption of either of these channels would have resulted in catastrophe.

The fact this didn’t happen last year was largely thanks to two crucial agreements secured early in the conflict: the Black Sea Grain Initiative, whereby Russia allowed Ukraine to continue exporting grain via the Black Sea (which is under its control), and a deal that allowed Russian gas to continue flowing to Europe via Ukraine. But the former has just been suspended, and the latter could soon be terminated. The true cost of this war, it seems, is about to greatly increase.