Impact of Russia — Ukraine War on Energy Markets and Policy

Henri Kouam
8 min readMay 25, 2022


On February 24th, 2022, Russia illegally invaded Ukraine, causing unprecedented harm to its national sovereignty and unraveling a migration crisis with grave humanitarian costs. During this period, the European Union and the U.S. have imposed sanctions on Russian exports and imposed embargoes to stall the Kremlin’s development agenda and accelerate a diplomatic outcome to the current conflict. Russia’s illegal invasion coincided with an economic recovery following the COVID-19 pandemic. During this time, oil prices have risen to new highs, nearing $100/bl and inflation across most advanced economies has equally breached the central banks’ 2% target. Oil prices are an important commodity for transportation, manufacturing, and heating. Crude oil distillates are used to manufacture chemical electronic components across a range of industries including fashion and chemicals. Meanwhile, global oil markets are much more complicated and integrated, which justifies an analysis of the impact of the Russian — Ukraine war.

This article will be divided into three parts. The first part will look at the relevance of Russian oil for U.S. refineries In part 2, we analyze the changes in oil prices resulting from a mix of western sanctions and possible effects of lower Russian supply and lower OPEC capacity. Finally, we look at alternative sources of crude for major importers of oil across Europe and Asia as well as the possible implications for energy majors and producers in these countries. Finally, we look at what is coming up in energy markets.

Why do you care? Investors across the globe are worried about the implications of higher oil prices on asset prices, return on earnings, and revenue for manufacturing companies that rely on crude oil inputs. Changes in the value of the currency and policy makers’ response to the current surge in oil prices will impact a range of asset prices.

Part 1: U.S. Crude Imports from Russia are more complicated than it seems

The U.S. is a net energy exporter and in 2021, it imported an average of 199,000 barrels per day (bpd) of crude oil and 473,000 bpd of other petroleum products from Russia. Russian crude accounts only for 3% of U.S. oil imports and only about one percent of total crude oil…

Henri Kouam

I am an economist and contributor to Nkafu policy, a think tank. I cover global economic, fiscal and monetary policy with policy and asset price implications.