Russia’s Invasion of Ukraine and Initiatives to Consider: A Whitepaper
Energy Supply, Geopolitical Events, and the Economy
Russia’s invasion of Ukraine has dominated headlines as a humanitarian crisis in Eastern Europe, which it is, first and foremost. It also has sweeping implications for the global energy industry and is affecting everyone on the planet, and it will continue to do so. With Russia playing a major role in the global supply of crude oil and natural gas (as well as other commodities), what can we expect for the near-term and long-term impacts of its invasion and for the accompanying responses from companies and governments across the world?
The impacts are substantial, and most businesses and individuals will need to make significant adjustments. For many, now is likely to be the best time to evaluate and/or pursue additional or replacement financing. It is virtually inevitable that the cost of both debt and equity capital will size over the coming year, and terms will be more difficult, while additional liquidity will likely become more valuable. Even those outside the energy industry will see ripple effects due to the invasion and corresponding global market disruption.
Impacts to date: Russia’s invasion and the global response
Players across the globe have taken decisive action in response to the invasion and to related threats. In addition to providing military support for Ukraine, the US, Canada, and Great Britain have banned Russian oil and gas imports (both direct and indirect), and many regions and companies have imposed curtailments of their own, relating to oil and gas as well as other products. For oil, those curtailments have reduced Russian exports by 3 million barrels per day (mm b/d), which together with the conflict has moved prices dramatically. At the same time, NATO countries have sent unprecedented amounts of military aid and equipment to Ukraine to support the country’s efforts to resist the invasion and protect its citizens. We’re also seeing numerous countries begin to think ahead in terms of their energy needs, considering alternative supplies to oil and gas — with Europe, in particular, expected to accelerate renewable energy projects and to seek other sources of oil and gas.
The full whitepaper is available for download here.
Meet Our Author
Founder | Managing Director
Mr. Johnson is a founder of Chiron Financial and has over 30 years of experience in investment banking.