Ukraine War Spills Beyond Borders into Global Economy

The war between Russia and Ukraine has taken a new turn as it extends beyond its borders into economic and social spheres. Despite efforts to broker peace, the conflict remains a high-intensity war of attrition with both sides relying on long-range strikes.

In August last year, US President Donald Trump met with Russian President Vladimir Putin in Anchorage, Alaska, but the meeting failed to reach an agreement on a ceasefire. A year later, hopes for a direct US-Russia deal have vanished, and the confrontation has deepened into economic and social spheres.

Ukraine has expanded its long-range attacks using drones and other weapons, targeting oil refineries, energy facilities, and logistics infrastructure in Russia. Kyiv describes this campaign as 'long-range sanctions' aimed at raising the cost of the war for Russia.

Russia's oil-refining throughput is estimated to have fallen by 25% to 27% year-on-year as of August, while its wheat exports in August were about 40% below the average of the past five years. This has transmitted the costs of the war into broader Russian society.