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SITUATION UPDATE 15 March, 2022 Back

Situation Update - Global fallout from Ukraine crisis

Henry Newcombe

Anti war protestors


  • Following the invasion of Ukraine, over 30 countries have established sanctions against Russia and its ally Belarus, which have aimed to isolate the countries from the global international order.
  • Energy and food prices have seen a rapid rise since the conflict began with the invasion bringing major uncertainty as both Russia and Ukraine are essential in global food production.
  • The UN believes around three million people have now fled Ukraine, a figure expected to rise, with a further 1.85 million internally displaced, many of whom are amassed in Ukraine’s west.
  • Significant disruption is expected across several European cities, particularly those closer to Ukraine, as thousands of refugees are taken in by EU countries.
  • Anti-war demonstrations have occurred across the globe in response to the invasion. Tens of thousands of people have marched in cities from New York to Bangkok.
  • Protests have also occurred within hundreds of cities across Russia which has seen an estimated 13,000 people arrested by security forces since the invasion began.


Following Russia’s recognition of the self-proclaimed republics of Luhansk and Donetsk on 22 February, and the subsequent invasion of Ukraine on 24 February, Moscow has seen waves of economic sanctions struck upon them by over 30 countries, including the US, EU, and members of the G7.

The sanctions have been political, economic and cultural in nature, targeting both the entire country or specific individuals, businesses, or groups with the ultimate aim to isolate Russia from benefiting from the global international order.

Whilst there has been an array of sanctions, the most significant measures have been focused on the Russian economy.

On 11 March, the G7 countries announced they would revoke Russia’s “most favoured nation” status, halting benefits afforded from membership of the World Trade Organisation (WTO). They also agreed to prevent Russia from being able to obtain financing from global institutions, including the International Monetary Fund (IMF) and the World Bank, further isolating Moscow from the international economic order.

In a similar vein, on 2 March, seven Russian banks were barred from the SWIFT messaging system which underpins global financial transactions and makes up 70% of all financial transfers in Russia. Major international projects involving Russia have also been put on hold, demonstrated by Berlin halting the Nord Stream 2 gas pipeline project which had been designed to double the flow of Russian gas to Germany. Other sanctions have limited the finances of Russian politicians and oligarchs, ceased trade with Russia, including the use of Russian commodities such as oil, and banned Russian flagship carrier, Aeroflot, from utilising countries’ airspace.

Moreover, many of the economic sanctions placed on Russia have also been placed on Belarus for their complicity in the invasion, acting as a staging post for Russian troops, and being a key ally of Moscow.

Following international condemnation and economic sanctions, over 300 multinational corporations from a wide array of industries have withdrawn from Russia, unifying against the invasion of Ukraine, whilst also wanting to avoid being caught on the wrong side of international economic sanctions and global public opinion. Notable examples include BP, VISA, McDonald’s, Boeing, and Ferrari.

In response, Russia has banned the export of at least 200 products through 2022 in an effort to mitigate the impact these sanctions have on industry.

While the Russian economy is reeling from financial sanctions, their impact has started to extend well beyond Russia’s borders. Notably, global energy and food prices have risen rapidly since the invasion as countries are already trying to recover economically from the COVID-19 pandemic. Ukraine and Russia play crucial roles in the global food production system, serving as the breadbasket for countries in the Middle East and North Africa that depend on their imports. The limitation of food production in the Black Sea region, combined with energy price rises effecting production, has seen food prices rise significantly, particularly in Yemen, Egypt and Lebanon, the latter of which is already facing a dire economic crisis.

In order to ensure food security as the Ukraine crisis deepens, some countries have even imposed export bans on various food stuffs, including Egypt and Indonesia. Beyond food, Belarus is a major exporter of fertilisers needed to plant an array of crops, but companies are now shunning their stocks as a result of the crisis which is also raising prices.

Russia’s invasion of Ukraine has also triggered a refugee crisis. The UN High Commissioner for Refugees (UNHCR) believes that as of 15 March around three million people have fled Ukraine into neighbouring countries. This figure is expected to rise, particularly as Russia continues to advance on Ukrainian cities.

So far, over 1.7 million Ukrainian refugees have now entered Poland, over 255,000 to Hungary and over 200,000 to Slovakia. Although these three countries have taken the most refugees to date, the EU has passed legislation granting Ukrainian refugees a blanket right to stay and work throughout the EU for up to three years. As a result, nations such as Austria, Croatia, Estonia, Germany, Greece, Ireland, Italy, Lithuania, the Netherlands, Portugal and Sweden are reporting the arrival of thousands of Ukrainians.

Meanwhile, it is estimated that some 1.85 million people are now internally displaced in Ukraine, many of whom have moved towards the west of the country where attacks have been relatively limited. However, recent attacks on Yavoriv military base, located 25km from the Polish border, and the western cities of Ivano-Frankivsk and Lutsk, may now see those internally displaced seek passage out of Ukraine entirely.

In response to the invasion of Ukraine, tens of thousands of people have taken part in demonstrations in cities across the globe, most recently, on 13 March, protests were staged in Warsaw, London, Berlin, Frankfurt, Hamburg, and Stuttgart, but have been seen as far away as Bangkok and Sydney. These protests have persisted, most consistently across Europe.

Protests have even materialised in Russian cities against the invasion but have been met with force. On 4 March, the Kremlin passed a law which criminalised independent “war” reporting and protests against the conflict, with penalties of up to 15 years in prison; however, protests have continued. Monitoring groups estimate that 13,000 protesters in Russia have been arrested. Conversely, pro-Russian counter protests have also been noted, mostly in the Serbian capital, Belgrade, organised by the far-right People’s Patrol.

Analysis and Implications

Whilst sanctions on Russia are nothing new, the level of coordinated economic, cultural and political sanctions against Moscow’s invasion are unprecedented. As a direct result of the invasion, and consequent sanctions, major uncertainty within financial markets has triggered the worst economic crisis in Russia since the fall of the Soviet Union in 1991.

The Russian rouble (RUB) is down 30% against the dollar since the invasion. Moreover, the Moscow stock market has remained largely closed by order of the central bank, as they look for ways to prevent asset price collapses when trading reopens. With the Russian economy stagnating even before the invasion, concerns have been raised about the possibility of the country defaulting on its debts, although this remains unlikely for the moment. Even so, the fall of the RUB has seen inflation and interest rates soar.

Ultimately, the longer the conflict in Ukraine endures, the more effective economic sanctions will become as Moscow may have to cut spending and raise taxes. US officials believe Moscow has looked for economic assistance from Beijing to alleviate its situation, which could help to undermine Western sanctions if ascertained, although Russian and Chinese governments deny this is the case.

Beyond Russia, sanctions applied to Belarus also have the potential to undermine its economy, whilst also being restrained as countries and companies globally avoid trade with Minsk. Belarus has previously been able to rely upon Russia for support, but sanctions may limit their ability to do so.

Other key allies, particularly those within the Russian-led Collective Security Treaty Organisation (CSTO), which orchestrated Russian security personnel stepping into support Kazakhstan’s government in the wake of protests at the beginning of 2022, could be affected if sanctions are expanded. Sanctions could decrease trade as a result, possibly fuelling anti-western sentiment within Russian-allied countries. To date, CSTO countries have looked to take a more neutral stance to avoid such measures, fearing becoming isolated from the international community.

As part of a wider announcement on 11 March, G7 agricultural ministers announced that they would leverage humanitarian aid where they can in a bid to mitigate the fallout from the conflict, but admitted they were struggling due to limited supplies and rising prices. Oil prices already reached their highest since 2008 earlier this month, with prices likely to go as high as 160 USD or even 200 USD per barrel as the crisis deepens.

The US has already announced it has immediately banned the import of Russian oil, whilst the UK, has said they will phase it out by the end of 2022. The EU is yet to follow suit, but a decision to do so may see new highs in the oil market. The EU currently relies on Russia for 40 percent of its gas supplies and Moscow has threatened to shut off the gas if the EU introduces an oil ban, which may bring significant increases in both commodities. However, Moscow is likely to be hesitant in stopping gas supplies with it being a major contributor to the Russian economy and a cornerstone in the country being able to pay off its sovereign debts.

Regarding food, alternative sources from countries such as Germany, Romania, Argentina and Australia may diminish the effect of a decrease in grain exports from the Black Sea region. However, if the conflict is prolonged or escalates further, the global wheat supply is likely to tighten, leading to a rise in food prices. The expected increase in prices may cripple some countries within the Middle East, particularly those already struggling with economic turmoil, such as Lebanon. This may result in demonstrations across multiple countries within the Middle East, particularly in places which subsidise the cost of staple foods.

Moreover, the large influx of Ukrainian refugees into European countries is having a direct impact on the cities in which they are arriving, particularly in Poland, Hungary, Slovakia, Moldova, and Romania. While travel restrictions within countries receiving Ukrainian refugees as a result of the conflict are limited, several European cities, including Warsaw and Krakow, are becoming more congested and accommodation is increasingly difficult to source, particularly the large chain hotels in major cities, with the situation likely to be exacerbated in urban centres closer to the border with Ukraine. International flights have so far not been affected by the ongoing crisis in Ukraine and the resulting influx in refugees, with the exception of those operated by Russian airlines.

Regarding COVID-19, neighbouring countries of Ukraine have lifted all restrictions for Ukrainian refugees entering or travelling through each country, including vaccination passports and self-isolation. Whilst some countries in Europe still have some COVID-19 restrictions for non-EU citizens, large influxes of Ukrainian refugees from the non-EU country will make these measures difficult to enforce. As a result, there is an increased risk of a resurgence in COVID-19 cases across Europe.

Having already seen anti-invasion protests across Russia, resentment against President Vladmir Putin’s regime could further be fuelled as Russian’s begun to feel the negative impact on their finances through sanctions, increased food and energy prices and multinational companies withdrawing from the country.

As a result, further demonstrations across Russia are possible and have the potential to intensify. Protests may take place across the country, the largest of which will likely occur in major cities such as Moscow or Saint Petersburg. Moreover, historically within Europe, as the number of migrants or refugees increase within countries, anti-immigrant sentiment has risen, particularly amongst far-right groups. Therefore, the ongoing influx of Ukrainian refugees in Europe, raises concerns over the possibility for reactionary protests.

Large scale demonstrations against the invasion have initially galvanised domestic support for housing refugees, but the longer the conflict goes on the more likely this support could dwindle. Whilst no notable anti-refugee protests have occurred of yet, there have been some reports of incidents of harassment from suspected nationalists in Poland and Moldova against refugees. There have also been reports of far-right groups conducting disinformation campaigns against refugees, spreading false information about alleged crimes conducted from Africa and the Middle East natives fleeing the conflict in Ukraine.

Potential disruption as a result of future anti-invasion, anti-refugee or even pro-Russia demonstrations across the world should be taken into consideration if operating in a business capacity, particularly if located near Ukraine or Russian diplomatic representatives, as well as near other government buildings or in public squares. While most previous demonstrations have passed relatively peacefully, the size of some have resulted in local travel and business disruptions.

Heightened security measures should also be anticipated near potential protest sites, increasing the likelihood of clashes should activists disobey dispersal orders by the authorities.


  • Be mindful of possible transport and business disruptions when travelling to major cities, particularly in eastern and central Europe. Avoid demonstrations if they do occur, whilst adhering to local authorities.
  • Regularly monitor reputable national and international news reports for situational updates over the coming days and weeks, keeping in mind the prevalence of disinformation campaigns.
  • Plan ahead when booking accommodation when travelling to central and eastern Europe, hotels, even in larger chains, are becoming increasingly difficult to source.
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