Name: Jamie Shane Abad

Crse&Sec: PSC31

Subject: Political Economy

Professor/Instructor: Jumel G. Estrañero

University: De La Salle University-Dasmariñas

Russia-Ukraine war: its impact to global oil economy.

I. INTRODUCTION

The Communist Party of Ukraine was little more than a puppet of the Moscow-based central
government of the Soviet Union, which was a political system ruled by Russia. To assist the
Soviet Union, its political and cultural leaders were either eliminated or exiled to Moscow.

Ukraine is a nation wounded by independence as a result of its turbulent past and lacks the
national traditions necessary to establish a new independent state. In addition, despite the
political alliance's dissolution, substantial relations exist in the areas of energy, trade, and culture
with Russia.

The Soviet Union's first two members were Russia and Ukraine. The two nations are now at odds
once more. On February 24, he declared to the Russian people that he was sending soldiers into
Ukraine from the north, south, and east with the intention of "demilitarizing and de-Nazifying
Ukraine." He claimed that the Ukrainian government had been harassing them and committing
genocide for eight years. These assertions lack any supporting data. It was presented as an effort
to stop NATO from establishing a presence in Ukraine. The overthrow of the elected president of
Ukraine's administration was a major priority. According to his advisor, Russian military
attempted two attempts to invade the presidential complex.

Oil prices have risen globally as a result of the conflict between the two nations. Following
Russia's invasion of Ukraine, worries over a shortage of Russian oil supply to the world caused
oil prices to jump to more than $120 per barrel.

II. BODY (you may include diagram, photo, illustration etc.)

Sanctions against Russia do not presently apply to energy exports. Refiners should avoid
sourcing Russian oil reserves, and Europe is contemplating alternatives, according to reports.
However, Russia may still find a market for the majority of its output by providing discounts on
purchases between $15 and $20. There is no doubt that the stress on the system is increased by
war. According to some analysts, the danger of supply interruptions has not yet been completely
factored into prices and may increase. With key oil benchmarks exceeding $110 today, up
another

15%, the price of oil and gasoline surged.

Consumers pay high rates for things like gas, electricity, and pump services. In addition to
driving up the cost of almost all products and services, increased energy prices are also raising
inflation expectations.

Global oil prices rose beyond $120 per barrel following Russia's invasion of Ukraine due to
worries about a Russian supply constraint. These have been driven to this point by the crisis
between Russia and Ukraine, with wholesale gas prices more than tripling and oil prices soaring
to levels not seen in nearly 14 years.

The world's greatest supplier of natural gas, which is required for heating houses, supplying
energy to aero planes, and the second largest exporter of crude oil is Russia.

Gas supplies to other nations are impacted when countries that rely on Russian supply get less
gas than they must displace. As a result, the UK's energy costs and prices continue to be largely
influenced by Europe.

Russia continues to import most of its oil and gas from Europe. This nation supplies most of the
oil and gas that Europeans import. The hydrocarbon sector in Russia is acknowledged by the
European Union as a source of reliance. Additionally, the European Union said that it will reduce
Russian oil imports by two-thirds. Oil and gas prices skyrocketed as a result of the invasion of
Ukraine and the Western response.

III. ANALYSIS

The research by Faisal Islam suggests that the price of oil might rise to $139 per barrel. The level
is the highest in almost 14 years. Furthermore, after fighting between Russia and Ukraine,
wholesale gas prices have more than quadrupled.

Economic sanctions and Western diplomatic policy related to the conflict between Russia and
Ukraine had an even greater influence on this performance. The current state of affairs suggests a
further crucial element influencing oil and gas prices.

Geopolitics, international relations, and influential countries' foreign policies The war between
Russia and Ukraine has disrupted the world's oil and gas supply, which has had an impact not
only on the pricing of these commodities but also on all economic activity that depends on
hydrocarbons. Stock exchanges on various markets have also declined. These include the FTSE
100 in London, the DAX and S&P 500 in the US, the DAX in Germany and France, and the
German and French stock exchanges. Energy specialists warn that household fuel expenses in the
UK might reach £3,000 per year if gasoline prices stay at this level, although the country's
average gasoline prices have consistently broken records. and the ultimate cost of the gasoline
was 161p, and 155p.

A war between Russia and Ukraine could affect not only energy and oil prices, but other costs of
living. Here's what the war between Russia and Ukraine could inflate.

1. food prices go up

2. Taxes will go up

3. The war between Russia and Ukraine is expected to cost the global economy her $2.8 trillion
by the end of 2023.

4. From January 2022 to March 2022, world oil prices rose by 38% of his. 5. Bulk shipping rates
have increased by almost 60% worldwide.
Changes in supply or demand in one region of the world have an indirect or direct impact on
other regions, primarily in the form of price swings.

Russia produces 24% of the world's natural gas and 12% of its oil. Oil prices are predicted to rise
in the "near term" as a result of restrictions on Russian oil shipments. The Philippines' "urgent
and significant concerns" are inflation and economic growth, but "if oil prices are unreasonably
high, the Philippines cannot do well in either area," according to economist Salceda. Diesel,
gasoline, and kerosene have all seen net price increases in the domestic market so far this year
totaling 10.85, 8.75, and 9.55 pesos a liter, respectively.

Legislation to lower or suspend gasoline excise duties is one of Salceda's proposed five-point
strategy to prevent spikes in oil prices. usage of public transportation to the fullest extent
possible; obligatory inspection and upkeep of all power plants to avoid "anti-competitive
behaviors" and oil company stockpiling and to reduce the effect of growing fuel costs on power
generating growth.

Investigating indigenous oil and gas wells further and transitioning to electric cars over the next
few years will help the nation's dependency on imported fuels and provide a long-term solution
to the issue of ongoing oil price increases.

The Philippines is a net oil importer so any spikes in international oil prices would push up pump
prices at home. Adding upward pressure to fuel costs is a weak peso, which could make imports
more expensive.

Demand for oil has finally returned as the global economy emerges from harsh lockdowns.
Based on emerging forecasts from the DOE, global oil demand in the fourth quarter is seen
hitting as much as 103 million barrels of crude oil per day (mbpd) in anticipation of winter
season, when power generation is high for heating. However, supply is currently only at about
103.22 mbpd.

IV. RECOMMENDATION

We, as individuals can do very little. But we can drive as energy efficient cars as we can. We can
combine trips with others, so we ride to stores or church in one car rather than three.
Electric cars are one of the most notable benefits electric cars have on the environment is that
they emit far less pollution than gasoline cars. In fact, they produce zero emissions. electric cars
don’t release harmful gasses or pollutants into the air. The reason is due to its clean and
renewable energy source.

Invest in solar panels and it will lower electricity bills (or heating bills if you install solar thermal
panels). Carbon footprint will shrink Charge an electric vehicle for free They need very little
maintenance compared to previous years, they’re at their cheapest ever price.

There are also exciting advancements regarding wind power. Wind costs 1-2 cents per kilowatt-
hour (after factoring in tax credits), making it one of the lowest-priced energy solutions
available.

Avoid using plastics because all plastics (and synthetic rubber) are made from petrol. Choose
products made from biodegradable and sustainable materials instead.

Liquified natural gas could be use also. Europe will replace Russian gas with Natural gas in its
liquified state. It is the perfect transition fuel. Natural gas can help meet emissions reduction and
improve air quality, as it produces 45% to 55% less emissions than coal and diesel fuel. Today,
approximately 30% of the world’s energy needs are met based on natural gas.

V. CONCLUSION AND WAY AHEAD

The price of transportation is in lockstep with the price of oil. The price of energy in general is
largely driven by the price of oil. Oil is probably the principal contributor to the chemical
industry which creates plastics and hundreds of other modern marvels. It’s not just the USA, it’s
the entire world economy who is rate of growth is helped by low-cost oil and hampered by high-
cost oil.

In conclusion, it’s clear that the war between Ukraine and Russia has had a notable impact on
world economies and financial markets. From rising inflation rates to disrupted global supply
chains that led to skyrocketing prices, many countries have been affected by the conflict in a
significant way.
A number of central banks have started tightening their monetary policies in an attempt to ease
the consequences of high inflation. However, this is unlikely to solve the issue, due to the
increase in prices of crude oil and natural gas.

It’s unknown how long the crisis is going to last, but predictions indicate that the situation is
improving in some countries, while others, like the UK, will continue feeling the impacts well
into 2023.

VI. REFERENCES

https://www.chathamhouse.org/2021/11/ukraine-russia-relations

https://www.weforum.org/agenda/2022/03/how-does-the-war-in-ukraine-affect-oil-prices/

https://www.bbc.com/news/business-63855030

https://www.bbc.com/news/world-europe-56720589

https://www.profolus.com/topics/why-are-oil-and-gas-prices-going-up-impact-of-russia-ukraine-
war/

https://fortunly.com/statistics/war-in-ukraine-economy-statistics/#:~:text=The%20ongoing
%20war%20between%20Russia%20and%20Ukraine%2C%20which,seen%20its%20currency
%20plunge%20and%20its%20GDP%20shrink.

https://www.investopedia.com/ask/answers/060415/what-are-main-substitutes-oil-and-gas-
energy.asp#:~:text=The%20main%20alternatives%20to%20oil%20and%20gas%20energy,shift
%20towards%20sustainability%20and%20more%20green%20business%20practices.

https://newsinfo.inquirer.net/1560071/lawmakers-propose-oil-price-hike-mitigations

https://www.forbes.com/sites/sap/2022/03/09/3-ways-to-reduce-dependency-on-oil-and-gas/?
sh=4c1f673f6cd4

https://www.philstar.com/business/2021/11/05/2139196/why-are-oil-prices-so-high-right-now
MESSAGE TO OUR PROFESSOR:

Hi sir! I am one of your silent students, but I really admire your hard work and dedication to our
country. I am amaze at how you manage your works and studies. Thank you for all the lessons
you’ve taught us, I really learned a lot. I hope you continue to teach students like us. God bless
you sir and always stay safe! 😊