The Impact of Russia-Ukraine

War on Global Trade

Group No.: 18
S003 Adarsh Bhadauria
S027 Dinesh Kumhar
S088 Shubham Singh
S099 Tejas Alhat
S110 Vivek Shah
Presentation Flow:

01 Overview
02 Impact on Commodity Prices
03 Supply Chain Disruptions
04 Sanctions and Trade Policies
05 Food Security Concerns
06 Impact on Global Economy
07 Alteration of Trade Relationships
08 Future Projections
01

Overview
The ongoing conflict between Russia and Ukraine has had a
profound impact on global trade, disrupting supply chains,
shifting geopolitical alignments, and creating unprecedented
economic challenges. This presentation explores key areas
affected by the war, emphasizing the long-term consequences
and emerging opportunities.
02

Impact on
Commodity Prices

Russia was a key energy exporter.

Ukraine was a significant grain exporter.
Energy
Crude oil and natural gas prices saw significant
increases. Supply chain daisruptions led to
increased volatility.

Grains
Wheat and corn prices jumped due to blocked
exports. Global food security became a major
concern.

Metals
Aluminum and nickel prices spiked due to
supply uncertainties. Industries relying on these
metals faced higher costs.
 03

Impact of war on
Global Supply chains
 China & EU Transportation routes blocked
- Increase in Gas Prices & Increase in
freight cost for all modes of
transportation
Blockage of black sea and Azov sea by
Russia - 100 shipes stalled at ukrainian
ports - 120 mn tons of goods could not be
shipped
Rail transport shift to ocean transport due
to blockages - creating container
shortages
Increase in One - Way pickup rates in
India due to container shortages
Increase in Logistics cost and lead times
Shortage of manpower for supply chain
(Source: https://www.dnb.com/perspectives/russia-ukraine-impacts-global-supply-chain.html)
Supply Chain Restructuring:
New Routes & Partnerships

New Routes
Alternative transport corridors developed
9900km New route formed b/w China & Europe - takes 20
days less than sea route - called as Mindo
Another route - Chongqing to reach Melzo in Italy - racing
in 22 days
Partnerships Shift
EU & Ukraine Agreement on Road transport - Cancellation
of EU Permits for Ukraine to supply goods in EU countries
Poland - Ukraine logistics collaboration
Grain Agreement with UN and Turkey
Alternative Suppliers
Diversification of sources
15000 Tier 1 Suppliers , 7.6 Million Tier 2 Suppliers R/n ships
of US rely of Russia .
Considering Onshoring and “ Friend Shoring”
Strategic stock of critical materials i.e. palladium and neon
for semiconductor production
 Redefining Rail Routes

(Source: https://gmk.center/en/posts/how-the-russia-ukraine-war-has-impacted-on-logistics-routes-and-supply-chains/)
 Rise in
Ukraine
exports
through
“Grain
Agreement”
(Source: https://gmk.center/en/posts/how-the-russia-ukraine-war-has-impacted-on-logistics-routes-and-supply-chains/)
 04

Sanctions &
Trade Policies
 Impact on Russia Diversification Efforts

Numerous countries imposed Nations previously reliant on

sanctions on Russia, significantly Russian oil sought to diversify
altering global trade dynamics. energy sources, increasing imports
U.S. and EU sanctions led to a 15- from the Middle East and the U.S.
20% reduction in Russian oil This shift reflects a strategic pivot
exports by mid-2022, impacting to reduce dependence on a single
Russia's revenue streams and supplier and enhance energy
trade relationships. security.
 Increasing Interest Rate
Impacting inflation

(Source: https://www.reuters.com/world/europe/putin-growing-concerned-by-russias-economy-trump-mulls-more-sanctions-2025-01-23/)
 05

Agricultural and
Food Security Crises
1 Ukraine's Role 2 Black Sea Blockade 3 Global Food Inflation

Known as the “breadbasket Russia’s naval blockade Reduced grain supplies and
of Europe,” Ukraine is a disrupted Ukraine’s grain fertilizer shortages fueled
major exporter of wheat, exports, worsening food soaring food prices
corn, and sunflower oil. shortages in countries globally.
reliant on imports.
Impact on Key Sectors:
Energy, Agriculture, Metals
Energy, agriculture, and metals sectors were hit hard. Energy
prices surged. Grain exports faced significant hurdles. Metal
supply chains faced disruption.

01 Energy
Price Volatility. Supply Shortages

02 Agriculture
Export Barriers. Food Security Concerns

03 Metals

Supply Chain Issues. Increased Costs

06

Impact on
Global Economy
Immediate Effect
Panic Condition globally.
Investors started taking money out of the market.
Worldwide stock market started crashing.
Sanction on Russia implemented.
Energy dependency and crises.

GDP Reduction
The International Monetary Fund (IMF)
estimated that the war would reduce global GDP
growth in 2022 by approximately 0.5%.
This reduction consequences are loss in economic
output, affecting investments and trade.

Inflation Surge
Many countries experienced increased inflation
due to rising energy and food prices.
USA saw inflation rates above 8% in 2022, in
decades.
Impacting consumer spending.
Trade Realignment
Regionalisation
Near-shoring & Friend-shoring
Russia made long-term contract with India nad
China.
LNG - Europe diversified in energy sector.

Improvements
Russia economy is touching $2.2 trillion showing
good growth in year 2023 - 24.

Long-term Adjustment
Focus on long term economic security.
Diversification and Regional partnership to
mitigate the future risk.
Building resilient supply chain.
 07

Alteration of
Trade Relationships
The war reshaped geopolitical landscapes.
Trade alliances strengthened or weakened.
Regionalization accelerated. Countries
realigned their trade strategies.

Trade Alliances
Strengthened partnerships.

Regionalization

Increased regional focus.

Trade Strategies

Realignment of policies.
 Trade Alliances

Russia increased its energy exports to China

and India, offering discounted prices to
secure long-term contracts.

The EU signed new LNG agreements with

the US, making it the largest exporter of
LNG to Europe in 2023.

Change in BRICS strategy and internal

differences - the BRICS group expanded in
2024 to include Egypt, Ethiopia, Iran, and the
United Arab Emirates (UAE)

(Source: https://www.iea.org/data-and-statistics/charts/average-russian-oil-exports-by-country-and-region-2021-2024)
 Regionalization Trade Strategies

Many countries have shifted toward Germany fast-tracked the

nearshoring and friend-shoring construction of LNG terminals to
particularly in critical sectors like replace Russian gas.
semiconductors, energy, and food. China has increased its stockpiles of
Countries are increasingly focusing grain and energy resources.
on regional trade agreements to Russia and China have increased the
ensure stability. E.g. African use of their respective digital
Continental Free Trade Agreement. currencies.
Countries in the Middle East and The US and EU have restricted the
North Africa to seek alternative export of advanced semiconductors
sources within their regions for food to Russia.
security.
08

Future Outlook
Future Outlook: Long-Term Adjustments
& Trade Resilience
Long-term adjustments are expected. Trade resilience is
essential. Countries need to adapt to the new global trade
environment. Flexibility is key.

01 Adaptation
Countries must adapt quickly.

02 Flexibility

Trade policies require flexibility.

03 Resilience

Building resilient trade networks.

 Future Projections &
Long-Term Shifts
Continued volatility in energy and food prices is expected, potentially
causing long-term shifts in global trade flows.

The war prompted discussions around energy independence and

diversification, leading countries to increase investments in renewable
energy sources and sustainable practices.

These changes will reshape the global economic order. As a result, the
world may witness a reconfiguration of trade patterns, increased efforts
towards food security, and a drive for energy independence.
 References
https://scale.mit.edu/news/how-war-ukraine-impacting-global-supply-chain
https://www.gep.com/blog/mind/russia-ukraine-war-logistics-impact
https://gmk.center/en/posts/how-the-russia-ukraine-war-has-impacted-on-
logistics-routes-and-supply-chains/
https://www.iea.org/search?q=russia
https://www.cfr.org/backgrounder/what-brics-group-and-why-it-expanding
https://energy.ec.europa.eu/news/focus-eu-energy-security-and-gas-supplies-2024-
02-15_en
Thank you.