Vladimir Putin’s forces have finally struck targets within Ukraine as war broke out Thursday in this part of Eastern Europe.
For the rest of the world, including Ghana, the immediate effect of an increase in crude oil price to $100 per barrel as a result is a worrying development.
The attack was preceded by the recognition by Putin of Donesk and Luhansk parts of Ukraine as independent states.
Cities and bases were struck with airstrikes or shelling as stunned civilians took cover in bomb shelters in a country which has witnessed such scenario before.
Ukraine’s government reported the movement of Russian tanks and troops as they breached the country’s territorial integrity. The conflict was already shaking global financial markets as stocks plunged and oil prices soared amid concerns that heating bills and food prices would skyrocket.
Ukrainian President Volodymyr Zelenskyy cut diplomatic ties with Moscow and declared martial law in a swift response.
President Vladimir Putin deflected global condemnation and cascading new sanctions as he pointed at his nuclear arsenal. He has threatened any foreign country attempting to interfere with “consequences you have never seen.”
The ringing sirens as the invasion lasted, prompted an immediate emergency Security Council meeting.
Putin’s claim that he was open to a diplomatic solution to the impasse between him and the Western allies over a proposed Ukrainian membership of the North Atlantic Treaty Organisation (NATO), he nonetheless amassed over a 100,000 troops along his country’s border with his neighbour.
Volodymyr Zelensky, the Ukrainian leader, at the height of the release of incessant intelligence reports about a Russian invasion, sought to play down the threat even as he prepared his forces for an imminent invasion.
Putin continued to flaunt his concern about the US and others not considering his security apprehension about the membership of Ukraine of NATO.
As the conflict rages President Akufo-Addo has expressed concern about the safety and evacuation of stranded Ghanaians in Ukraine amidst oil prices.
Already, Western and European countries are beginning to feel the heat of this ongoing conflict as the price of brent crude oil crossed $100 per barrel-mark on Tuesday to hit a seven-year high after recording an average of $87 in January this year. Though most of these countries are looking for alternative crude supply, Russia’s influence in the industry cannot be discounted.
According to Information Minister Kojo Oppong Nkrumah, President Akufo-Addo is concerned about the potential loss of lives and the safety of Ghanaians but he is also frustrated by the effect of the conflict on global crude oil prices and how it in turn affects Ghana’s economy.
“Although the Russian-Ukraine crisis is not happening on the African soil, the interconnectivity of the world economy and financial markets can trigger reactions in Ghana, and that has been the concern of the President,” he said.
Already, fuel prices at various pumps in the country are inching towards the GHS 8 mark causing transport fares to be increased by some 15% effective February 26, 2022. The crisis when escalated, could spawn supply chain bottleneck which effect would be increase in global oil and liquefied natural gas prices and its associated inflation pressures in several importing countries. This is likely to have a devastating impact on the transport sector.
Also, at a time when the world is dealing with rising energy prices and supply-demand imbalances in several metals and commodity markets, a steady supply of crude from Russia is crucial. This means that fuel prices in the country is contingent on the ongoing conflict and is likely to negatively impact Ghanaians, who for apparent reasons are already facing spikes in fuel prices. Not only would prices at the pumps rise, but an increase in price on oil and natural gas will drive up the cost of electricity.
If the situation continues or even worsens, the ripple effects could be more broad-based and have an impact on other commodity prices, trade, financial market and potentially monetary policy.
At the micro level, higher oil prices increases the cost of production especially for firms that uses fuel as an input and/or engages in transporting goods from one place to another. Also an increase in oil price increases the household’s expenses on petroleum products leaving less to be spent on other goods. This in the long run negatively affects the individual’s income and standard of living thereof.
At the macro level, the higher production cost associated with rise in oil prices are often passed on to the final consumer by the supplier. This contributes significantly to the rate of increase in the general price level in the economy. Again, tension between the two countries can generate wide-ranging risk aversion which will affect funding and investment conditions.
Since global crude oil prices are significant drivers of inflation, economic growth and standard of living, the impact of the conflict will be dare should tensions not deescalate anytime soon.
Meanwhile, the Foreign Ministry has cautioned students and other Ghanaians in Ukraine to seek help at government places of shelter. This the Ministry said is to ensure their safety temporarily as government “engages the authorities, our relevant diplomatic missions and our honorary consul on further measures.”
Ghana joined the rest of the world to condemn the ‘invasion’ of Ukraine when her envoy to the UN Harold Agyeman addressed the emergency meeting called by the Ukrainian leadership.
During the meeting, the Ukrainian envoy to the UN, as he took the floor, asked the Russian Foreign Minister Lavarov, whether Putin had not ordered an invasion.
“As of today, our countries are on different sides of world history,” Zelenskyy tweeted. “Russia has embarked on a path of evil, but Ukraine is defending itself and won’t give up its freedom.”
His adviser Mykhailo Podolyak said, “A full-scale war in Europe has begun. … Russia is not only attacking Ukraine, but the rules of normal life in the modern world.”
The attack targeted a country the size of Texas that has increasingly tilted toward the democratic West and away from Moscow’s sway. The autocratic Putin made clear earlier this week that he sees no reason for Ukraine to exist, raising fears of possible broader conflict in the vast space that the Soviet Union once ruled. Putin denied plans to occupy Ukraine, but his ultimate goals remain hazy.
Ukrainians, who had long braced for the prospect of an assault, were urged to stay home and not to panic despite the dire warnings.
With social media amplifying a torrent of military claims and counter-claims, it was difficult to determine exactly what was happening on the ground.
Associated Press (AP) reporters saw or confirmed explosions in the capital, in Mariupol on the Azov Sea, and Kharkiv in the east. AP confirmed video showed Russian military vehicles crossing into Ukrainian-held territory in the north from Belarus and from Russian-annexed Crimea in the south.
“We are facing a war and horror. What could be worse?” 64-year-old Liudmila Gireyeva said in Kyiv. She planned to flee the city and try to eventually get to Poland to join her daughter. “Putin will be damned by history, and Ukrainians are damning him,” she added.
Governments from the US to Asia and Europe readied new sanctions after weeks of failed efforts for a diplomatic solution. But global powers have said they will not intervene militarily to defend Ukraine, though NATO has deployed troops to Eastern Europe aside stuffing Ukraine with ample weaponry.
As with all wars, the Russian propaganda machinery is active. The Russian military have claimed wiping out entire Ukrainian air defences within hours as the latter deny some of these stories.
Meanwhile, there is a flurry of sanctions from US and her European allies, one of which is the suspension of the Nordstream gas pipeline from Russia to Germany by the latter.
Nobody knows what tomorrow holds for the world as the US and NATO have so far, only depended upon sanctions as responses to the act of aggression being undertaken by Russia.
The US has already signed a pact with Qatar to address the energy challenge it will face as a result of the estranged relationship with oil and gas rich Russia.
With the Middle East depending upon Ukraine for some 30 per cent of its wheat supplies, the war is presenting a worrying reality.
BY A.R. Gomda with Agency Reports