Soldiers with military uniforms board a plane bound for Eastern Europe at a military airfield in Fort Bragg, North Carolina, USA on the 14th (local time) amid escalating military tensions over Ukraine. The U.S. is deploying 4,700 troops stationed here in Poland, bordering Ukraine, in preparation for a Russian invasion of Ukraine. yunhap news
The ‘Ukrainian risk’ due to concerns about Russia’s invasion of Ukraine is rapidly realizing as the local war escalates. The New York stock market continues to decline by 0.5-1.5% (Dow Index) every day, and the domestic KOSPI is also facing a similar decline for the third day. International oil prices have already reached $100 per barrel due to supply instability from Russia. Grain prices, such as wheat and corn, are also on the rise due to unsatisfactory supply and demand from Ukraine, putting pressure on the global economy.
The Ukraine crisis is a direct confrontation between Russia, the United States and Europe. The worst-case scenario is an all-out war between Russia and Ukraine. In that case, there is a possibility that the war will expand to the level of World War II as the United States and NATO member states directly or indirectly intervene against Russia. The best scenario is for the US to actively accept Russia’s security demands, which oppose Ukraine’s accession to NATO, in order to pave the way for a broader geopolitical framework, such as the rift in the Sino-Russian solidarity. Then the situation in Ukraine can be quickly stabilized.
However, the reality is likely to unfold somewhere between the worst and the best. This is a scenario in which the Ukraine risk prolongs as the US and Europe respond to situations such as the Russian-led invasion of Ukraine and the deployment of aggressive armed assets targeting Europe. In that case, as the political, economic, and military sanctions of the US and Europe on Russia and Russia’s counterattack are intertwined, the economic impact such as oil price instability and global trade contraction will inevitably be amplified.
The Ukraine crisis could become a huge bad news that will hit the Korean economy once again following Corona 19. In the event of an armed conflict, it is necessary to prepare for a tsunami-like shock wave across the real world and finance, as well as the international oil price, which will rise to $120 per barrel immediately. President Moon Jae-in personally presided over the foreign economic and security strategy meeting on the 14th and ordered support for related companies, response to energy and raw material supply and demand, and market stabilization measures.