Emre Gurkan Abay and Emir Yildirim
14 May 2025•Update: 14 May 2025
MOSCOW
The ongoing Russia-Ukraine war has upended the global economic balance, affecting sectors ranging from agriculture to tourism, energy, transportation, and logistics.
Now in its fourth year, the war has significantly impacted the global energy sector, where both countries play key roles. It has again exposed the vulnerability of supply chains during the post-pandemic recovery and highlighted dependencies on critical sectors.
Before the war, Russia accounted for around 14% of global oil and 9% of natural gas supply. It was the EU’s largest natural gas supplier, with a market share of 40%, thanks to five decades of investment in pipeline infrastructure.
Since then, Russia has lost ground to other liquefied natural gas (LNG) suppliers like the US, Qatar, and Norway. Last year, Russia’s gas shipments to the EU dropped to 15 billion cubic meters (3.96 trillion gallons) from 201.7 billion cubic meters (5.3 trillion gallons) in 2021.
The main pipelines transferring Russian natural gas to Europe -- the Nord Stream 1, 2, and Yamal-Europe -- stopped shipments from Ukraine on Jan. 1 this year.
The TurkStream gas pipeline is now the only route for Russia to ship natural gas to Europe.
While the US exported around 17 million tons of LNG per year before the war, the country’s shipments to the EU reached 50 million tons in 2023.
To offset losses in Europe, Russia is redirecting gas exports to Asia, particularly China, via the Power of Siberia pipeline. Gazprom, Russia’s state energy giant, plans to launch Power of Siberia 2, also known as the Altai pipeline, to increase shipments to China.
The global breadbasket
In agriculture, Russia and Ukraine once supplied about 30% of global wheat, 32% of barley, and 50% of sunflower oil. The war disrupted these flows.
Ukraine’s grain exports via the Black Sea came to a standstill, later resuming under the Black Sea Initiative, launched with an agreement signed between Russia, Ukraine, Türkiye, and the UN.
The agreement, also called the grain deal, was suspended in July 2023 due to disagreements between Russia and Ukraine, but Türkiye continues its efforts to resume the initiative.
Countries like Egypt, Lebanon, and Somalia, which import most of their grain from Russia and Ukraine, saw food prices rise.
Sweeping sanctions on Moscow also caused problems with access to fertilizers.
To mitigate market losses, Russia is boosting ties with Africa. According to the Russian Ministry of Agriculture, Russia’s agricultural exports to Africa rose 19% year-on-year in 2024.
Rerouting global travel, trade
Aviation and logistics have also been severely impacted by the war. Ukraine closed its airspace to commercial flights the day the war began and the EU closed its airspace to Russian aircraft on Feb. 28, 2022.
In turn, Russia banned some 36 countries, including the EU, from its airspace on the same day. These restrictions remain in place today.
Studies have found that around 5% to 10% of all international flights have had to change or extend their routes due to these restrictions.
Russian tourists now have limited access to Europe, while European carriers face what they call unfair competition from Chinese airlines that do not have to avoid Russian airspace on Asia-bound routes.
The EU and the US imposed comprehensive sanctions on Russian tankers, but Russia is operating a “shadow fleet” of tankers to clandestinely export oil and evade sanctions.
