Russian President Vladimir Putin has recognized Donetsk and Luhansk, two regions of pro-Russian rebels in eastern Ukraine, as independent states. News Reuters.
In a televised speech Monday night, local time in Moscow, Putin described Ukraine as an integral part of Russia's history. He said eastern Ukraine was once Russian territory. He is confident that the Russian people will support his decision.
According to the Kremlin, Putin announced his decision in a phone call to the leaders of Germany and France. He later signed the decree and gave a speech on state television.
In a long speech, Putin outlined the region's history. He also spoke about the recent tensions over NATO expansion in Eastern Europe, starting with the Ottoman Empire.
"I think a decision needs to be made, Putin said. That decision should have been made long ago. That is the immediate recognition of the independence and sovereignty of the Donetsk People's Republic and the Luhansk People's Republic. "
Earlier, Putin said Ukraine's accession to NATO would pose a direct threat to Russia's security.
Impact of the Ukraine-Russia war on the world market
Russia's aggression in Ukraine will have a devastating effect on the world economy. Analysts say the current crisis could have an impact on fuel prices, starting with wheat. There will also be instability in other sectors of the economy.
Russia's war with Ukraine and the West could affect world markets, Reuters reports. Among them
Cereals and wheat
An attack on Ukraine could disrupt the flow of merchant ships across the Black Sea. The effects will be devastating. This may increase the price of food grains imported and exported through this route. The Corona epidemic has already reduced people's purchasing power in many parts of the world. As a result, experts believe that if food prices rise again, the crisis will worsen.
Ukraine, Russia, Kazakhstan and Romania are the four largest exporters of food grains. Products of these countries are exported through various ports of the Black Sea. Russia is the world's top wheat exporter. According to the International Crop Council, Ukraine is set to become the world's third-largest maize exporter in fiscal year 2021-22. The country ranks fourth in wheat exports.
Natural gas and fuel oil
Russia meets 35 percent of Europe's natural gas demand due to fears of aggression in Ukraine. The country supplies gas to Germany via a pipeline via Belarus and Poland. Gas flows directly from Russia to Germany via No rd Stream 1. Moscow, on the other hand, supplies gas to Europe via Ukraine.
Meanwhile, after No rd Stream-1, this time Russia and Germany are on the way to build No rd Stream-2 pipeline. The launch of the new project would increase Russia's gas imports to Europe, as well as its dependence on Moscow for energy. However, Berlin has warned that the project will not go ahead if Russia invades Ukraine.
Corona's impact reduced gas demand in Europe in 2020. As a result, Russia is facing losses due to reduced gas supply. Despite the increase in demand last year, the country has not been able to fully recover. Gas prices have risen to record levels to offset losses.
Analysts say imposing sanctions on Russia could push up gas prices further. This will reduce gas supplies to Western Europe via Ukraine and Belarus.
The Ukraine-Russia conflict could also put the fuel oil market in crisis. Fuel oil extracted from Russia goes through Ukraine to Slovakia, Hungary and the Czech Republic. In 2021, Moscow exported 11.9 million tons of crude oil to countries through Ukraine. Where the previous year's amount was 1 crore, 23 lakh tons.
Financial services provider JPMorgan said fuel prices could rise to 150 to 150 a barrel once the conflict begins. As a result, global GDP growth could slow to 0.9 percent in the first half of the year. At the same time, inflation could more than double to 7.2 percent.
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