Western Companies pull out operation from Russia due to war sanctions

The Russian-Ukraine war is still on fire. The continuous advances of the Russian soldiers and the resistance of Ukrainian forces to defend their country have led to multiple casualties an art school in Ukraine was bombed by Russia. The school sheltered over 400 people and they were trapped beneath the rubble, worst is that their condition was uncertain.

As of Monday, the UN reported 925 civilian casualties, and most of them are caused by explosive devices although the office says that the actual casualties might be higher. As the war continuously going on, the Russian government doesn’t pay attention to the warning of the allied nation hence sanctions due to their negligence have led western companies to stop their operation in Russia.

Australia ban exports of alumina and aluminum ores to Russia as sanctions of invading Ukraine. The Russian oligarch, Oleg Deripaska who holds a stake in Alumina ores in Queensland was also sanctioned by Canberra.

The famous western fast-food restaurant, “McDonald’s” has announced that their doors will be closed because of the Russian invasion of Ukraine. Other big companies such as Ikea, H&M, Coca-Cola, PepsiCo, and Starbucks also decided to stop their business operation in response to the western sanctions against Russia.

Of course, when we are talking about Russia, the point that this country is one of the biggest producers of oil and natural gas is a big issue and loss to the world market, this is also the reason why the prices of oil and natural gas products dramatically increase plus it added the fact that we are almost at the post-partum of the pandemic hence it is natural for the energy products to return to its original prices or possibly higher than that which is normal for global trading because that’s how the market works.

 We experience drastic oil price hikes because big energy companies are now withdrawing and leaving their joint ventures with Russia as a response to the western sanctions. Some of the big companies that announced pulling out their joint ventures with Russia are the following

·         Equinor – Norway’s biggest energy company with over $1.2 billion in joint ventures.

·         Shell – which will cost the company’s withdrawal of about $3 billion, and;

·         BP – which will withdraw its 20% in Rosneft which in turn will cost $14-$25 billion.

There are other companies that decided to pull out and/or stop their operation in Russia but I will now leave the research to you.

If the Russian-Ukrainian war continues for long and the warning of Ukraine for WWIII emerges then we can assume the worst possible prices for all of our commodities. Remember if the main products in producing processed products continue to rise up then say hello to a massive inflation rate leading to the expensive price of our basic commodities.