The global fallout of a war between Russia and Ukraine

Russia has begun transporting blood and other key medical supplies to troops massing on its border with Ukraine, US officials have warned, in the latest signal of Moscow’s military readiness.

Three current and former officials told Reuters that “concrete indicators – like blood supplies – are critical in determining whether Moscow would be prepared to carry out an invasion”. The development came as US Secretary of State Antony Blinken yesterday told reporters that the Kremlin could give the order for an attack at “very short notice”.

Deliveries of key supplies to Moscow’s frontline come as Ukraine’s Western allies fear an escalation in hostilities. A conflict “could have global consequences”, The Economist said, with “human suffering, economic shock and a geopolitical realignment” among the first dominoes to fall.

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Spiralling conflict

“Seldom in the field of human conflict did so much hang on the whims of one man,” said The Economist.

Should Vladimir Putin give the order for Russian troops to advance into Ukraine, Europe would be facing its “biggest war since the 1940s, and the first toppling since then of a democratically elected European government by a foreign invader”.

The most immediate impact of an attempted invasion would be that “Russians would not only suffer casualties, especially during a long-running insurgency, but also cause the death of untold Ukrainians”. That means that a “big war entails extraordinary risks”. However, “a smaller war that limits these risks may fail to halt Ukraine’s Westward drift”.

While the Kremlin has control over when any conflict might begin, the second impact would be “heavy sanctions”. Western nations would “harshly penalise” its banks and deprive Russia’s economy of “crucial American high-tech components”, the paper added.

Putin has spent years shock-proofing Russia’s economy against sanctions. But while “the ultra-rich” may be able to avoid the worst impacts of sanctions, “ordinary Russians would suffer from lower living standards, which have already been falling over the past seven years”, the paper said.

There is also a danger that “a move by the Kremlin would also ripple far beyond the two nations’ shared border”, CNN reported.

Experts have voiced fears that “it could usher in a new era of uncertainty in eastern Europe”, as well as “disrupting supply chains and the global economy, and forcing a shift in geopolitical influence that damages the credibility of the West”.

Any eventuality in Ukraine that Moscow “could chalk up as a victory could encourage other nations engaged in border disputes”, the broadcaster added.

“China will be watching carefully for lessons that it can draw about Western resolve,” Nigel Gould-Davies, a former British ambassador to Belarus who is now senior fellow at the International Institute for Strategic Studies, told CNN.

“The Taiwanese are going to draw lessons from that,” added James Nixey, director of the Russia-Eurasia programme at the Chatham House think-tank, “as is anybody in a border dispute, living next to a vastly superior leader.”

China last week deployed 39 warplanes into Taiwan’s air defence identification zone, the largest daily figure since record-breaking incursions triggered tensions in October.

And the risk of allowing Russia to invade Ukrainian territory means the “likelihood of China invading Taiwan would surely rise”, The Economist warned.

Much will depend on how Nato responds to a Russian incursion, with Joe Biden upping the ante over the weekend when he announced that he was sending a small number of US troops to bolster the Nato presence in eastern Europe.

Ukraine is not a Nato member, but the reaction to any Russian hostility would require “a response all along the Nato front line that acts as a deterrent … and you have to have a whole war-fighting strategy around that”, Neil Melvin, director of international security studies at the Royal United Services Institute, told CNN.

“In Europe, this would change things enormously because we’re so far from thinking in those terms,” he added. “It’s going to be a huge shift.”

Economic shockwave

While the brutality of the battlefield would create immediate problems on Europe’s eastern border, the impact of a conflict would also be felt around the world.

Financial markets and economists are currently preoccupied with rising inflation rates, but “some leading global market analysts are warning that the risks of war, and even the costs of an uneasy peace, are being underpriced”, ABC News reported.

The crisis is “pushing up the price of oil and gas, as well as key metals used for everything from car making and electronics to kitchenware and construction”.

But according to Rabobank’s global strategist Michael Every, it “represents a tipping point in a larger metacrisis: the fracturing of the post-1945, -71, -78, and -91 world order”.

“Russia’s role as a supplier of natural gas to Western Europe means that energy prices could spark bouts of volatility across other financial markets,” MarketWatch said. As troops in eastern Ukraine keep one eye on the horizon, a “scramble to secure additional gas supplies for Europe” has already begun.

Moscow supplies “around 30% of the European Union’s natural gas”, CNN reported, “with supplies from the country playing a vital role in power generation and home heating across central and eastern Europe”.

It has “already been accused of exploiting that reliance”, prompting the International Energy Agency to warn that “Russia has contributed to an undersupply of gas in Europe by reducing its exports”.

“We’ve seen Russia in recent months exploit and exacerbate the problems of global energy supply and higher prices,” Gould-Davies told the broadcaster. “Could they contemplate the cost of something much more serious than this?”

The annexation of Crimea in 2014 “created bouts of volatility, but nothing that knocked global markets out of their stride”, MarketWatch said. But economists and traders should not “count on a similarly subdued reaction in the event of a full-scale invasion”.

Analysts have warned that an invasion could “cause UK grocery bills to rocket further”, The Telegraph reported, as key supplies from the “breadbasket of Europe” would be disrupted if conflict were to break out.

“An invasion could cause wheat prices to double and impact half of Ukrainian grains production”, the paper continued, “putting more pressure on UK food prices as they soar at their fastest pace in almost a decade”.

With warnings already mounting over a “cost of living crisis”, JP Morgan estimates that “constraints on supply would drive wheat prices to as high as $11 per bushel, up from just under $8 currently”.

Where does the UK stand?

The UK government has so far been among the most bullish defenders of Ukraine, signing off on the export of arms to Kiev in an effort to bolster its defences and provide a clear deterrent to any Russian aggression.

“The UK has a legal duty to defend Ukraine,” the BBC said, having signed a deal in 1994 that pledged to “to respect the independence and sovereignty and the existing borders of Ukraine” and provide assistance to Ukraine if it “should become a victim of an act of aggression”.

Russia was also a signatory to the memorandum signed in Budapest.

Most important to the UK is that it stands in opposition to “t​​he redrawing of European borders by force”, a key policy position that is threatened by Russian designs on Ukraine.

“Ukraine is not far away” and is “an ally of European powers and has a pro-Western government,” the BBC added.

With “autocratic leaders” watching to “see how robustly the West resists attempts to undermine the territorial integrity of a sovereign nation”, it is simply not in the UK’s “interests for Eastern European allies to fall under the shadow of Russian influence”.