The most serious effect of the Russia-Ukraine war for the world economy will be higher commodity prices. Oil prices will remain above $100/barrel for as long as the conflict rages on, EIU said in its global outlook report.
The threat of sanctions on Russian hydrocarbon exports and uncertainty surrounding supplies will exacerbate existing market tightness. European gas prices will rise by 65 per cent this year, after a fivefold rise last year. Europe has limited gas stockpiles, and there are concerns about gas supplies for the 2022/23 northern hemisphere winter season. Europe is reducing its demand for Russian gas, which will lower Russian output and put further pressure on supplies, Agathe Demarais, Global Forecasting Director, EIU, said.
