2022), and amplified trade disruptions and supply bottlenecks (Borin et al.

Most recent contributions concerning the economic implications have analysed how the war has exacerbated recession risks and inflation dynamics (Bachmann et al. The war in Ukraine has spurred a prolific policy and academic debate spanning across multiple dimensions (Garicano et al. In 2020, Russia accounted for around 29% of crude oil and 43% of natural gas imports into the EU, though dependence on Russian energy exhibits a large heterogeneity across member states, with countries in central and Eastern Europe, Germany, and Italy displaying the greatest reliance. As the war escalated, prices tensions spread from the spot market to the whole term structure of futures energy prices, suggesting that the cost of energy will remain higher for longer.Įurope’s heavy reliance on energy imports from Russia explains the marked response of local energy prices to the war in Ukraine. This dynamic was particularly pronounced in Europe where Russia’s invasion of Ukraine added unprecedented pressure to the European energy market: between 23 February, the day before the start of the conflict, and 31 July (27 September), European gas and electricity wholesale prices increased by 115% (109%) and 237% (138%), respectively.

Global energy prices have been steadily rising since mid-2021 as pent-up demand spurred by the post-pandemic recovery fuelled considerable tightness in the energy market.

Editors' note: This column is part of the Vox debate on the economic consequences of war.

Russia ukraine conflict 2020