Ukraine's armed conflict has had a significant impact on global trade, international energy markets, trade routes, food production, and a variety of other industries. This shift will inevitably result in winners and losers. ##Russia and Ukraine will undoubtedly be among the losers, regardless of who wins the war, as they have already lost a large number of people, production capacities, and money.
Who Are the Winners?
Because Russia and Ukraine are two important countries in global natural gas production, many countries were forced to look for alternative energy resources other than natural gas. The gas pipelines are damaged, and EU member countries are unwilling to support Russia by purchasing natural gas. As a result, other countries selling natural gas are gaining a competitive advantage in the energy industry.
At the same time, alternative energy resources such as solar power, wind power, nuclear power, and new green energy technologies are attracting more funds for research and development and investment. The armed conflict in ##Ukraine has also resulted in the construction of a gas pipeline from Israel to Europe, increased investments in renewable energy technologies, increased LPG imports by ship, and the use of reserved natural gas in the US. This entire scenario represents a reorganization of the international energy industry, and new market winners will emerge.
The global food industry is also facing an important challenge since Ukraine and Russia are two important grain producers.The war has resulted in significant production losses, despite the fact that exporting grains is a critical issue for Russia and Ukraine. This has already resulted in an increase in grain prices on the global market. Despite the fact that both countries signed an agreement in Istanbul, there is still a lot of uncertainty. Grain production will be reduced, resulting in higher prices and profits for the remaining producer countries.
Finally, as is customary, weapon-producing countries will profit more because countries concerned about becoming involved in the armed conflict in Ukraine, including Ukraine and Russia's neighbors, are expected to increase their defense spending.
What about the Losers?
On the other hand, the remaining ones are all losers. Food and energy prices have already risen. If the uncertainty caused by the armed conflict in Ukraine continues, life will become more difficult for people with average or lower incomes. Similarly, rising energy prices spell trouble for SMEs. The developed European countries have created assistance programs for people with average incomes and below, as well as their SMEs. However, not all countries are able to implement similar financial assistance programs. Furthermore, if the armed conflict continues, it will be impossible to support regular citizens and SMEs. This situation has the potential to disrupt supply chains, reduce output, and raise unemployment rates.
Learn More with ##EXIMA
Are you interested in learning more about the trade industry? Check out other articles on our Media Page today and avoid common mistakes traders tend to make!