Sanctioning Russia is proving costly for the West — RT Business News

Unprecedented sanctions against Russia have driven up energy costs in Europe and the United States, driving record inflation and making it increasingly expensive for farmers and truckers to refuel their machinery, d buy fertilizer or meet other costs. In Europe, which depends on Russian oil and natural gas, the sanctions have worsened an energy supply shortage that has driven up costs for households and businesses. RT takes a look at what life without Russia is like for the West these days.

  1. High energy costs trigger unrest
    People protested across the EU as the cost of diesel and petrol became prohibitive. Thousands of truck drivers went on an indefinite strike in Spain last Monday, leading to traffic jams and pickets across the country. A few trucking companies in Spain have ceased operations due to high costs leading to job losses for some. In Italy, a liter of gasoline and diesel now costs more than two euros due to sanctions. France has also been hit by protests over soaring fuel prices. Hundreds of protesting farmers blocked traffic in central Athens to demand that the government grant them additional concessions to meet higher energy costs. In the United States, consumers must now pay at least twice as much for gasoline after Washington announced an embargo on energy imports from Russia.
  2. Empty shelves in grocery stores
    The truckers’ strikes have caused supply problems affecting the food industries of entire countries. Images of empty shelves in grocery stores are becoming more common in Europe as the supply of food and staples has been affected.
  3. Governments warn against panic buying
    Some retailers have had to limit sales of certain products to prevent customers from buying more than “normal domestic quantities”. Governments insist that supply shortages are a “hoax” and appeal to people not to panic to buy. Experts say uncertainty in the market is likely to persist and the situation could even worsen in the coming weeks.
  4. Skyrocketing food prices
    Global food prices, which have already increased due to the coronavirus pandemic, have soared further amid the crisis in Ukraine. Russia and Ukraine are key global suppliers of wheat, as well as sunflower, rapeseed, flax and soybeans used for cooking oils and animal feed. Russia and Belarus, which also face Western sanctions following the crisis in Ukraine, are the world’s main fertilizer suppliers. The resulting spike in fertilizer prices means farmers around the world face higher costs to grow their crops. In Italy, prices for pasta, flour and vegetables rose sharply, with sunflower oil prices rising the most, by 19%. Data from the national agricultural trade organisation, the Coldiretti, shows that the cost of bread has almost doubled since November, currently reaching €8 per kilo. Some German supermarket shelves have been stripped of cooking oil and flour, as they were in March 2020 when the Covid pandemic began. More recently, the cost of cooking oil has risen dramatically, with a cheaper bottle now costing almost €2, up from less than €1 just a few months ago.
  5. The struggling global auto market
    The Ukraine crisis has added to the pains of automakers, which have been struggling with high prices due to Covid-related disruptions, including shortages of semiconductors. This week, major automakers announced they would close factories in Europe and raise prices further as supply problems mount. In the United States, used vehicle prices are currently well above historical norms amid a shortage of new cars and trucks. Russia and Ukraine are major suppliers of essential automotive commodities like neon gas, aluminum, platinum and palladium, and components like harnesses. Auto market data provider S&P Global Mobility said last week that the Russian-Ukrainian conflict and rising commodity prices will lead to five million fewer cars being built over the next two years.
  6. Europe’s anti-crisis appeals
    The prime ministers of Spain, Portugal, Italy and Greece met on Friday to demand an urgent European Union-wide response to the energy crisis following the next meeting of the European Council. The Spanish government has said it plans to introduce measures against high energy and fuel prices later this month. Anxiety in Europe is heightened by fears that Russia may respond to Western sanctions by cutting off energy supplies to the continent, sending their economies into recession.

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