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Putin has ordered forces from Russia to enter parts of Eastern Ukraine in a move frowned at by several world powers including the US.
After announcing Monday evening that he would recognize their independence, President of Russia Vladimir Putin ordered troops into two breakaway regions of eastern Ukraine. The Russian President’s earlier stated:
“I deem it necessary to make a decision that should have been made a long time ago and to immediately recognize the independence and sovereignty of Donetsk People’s Republic [DNR] and Luhansk People’s Republic [LNR].”
However, deciding to invade the eastern Ukraine region comes across as an absolute U-turn from an earlier peace-driven stance. This action has led to far-reaching ramifications for the price of oil, as well as stocks across the board. In addition, Putin’s move strains Russia’s tenuous relationship with Western powers, who sought a diplomatic resolution to the ongoing strife.
Although peacekeeping forces received an executive mandate to enter Donetsk and Luhansk, the mission is still unclear. In an hour-long televised session, Putin censured NATO and the US and justified his involvement in the Ukrainian hotbed to the Russian citizenry. In addition, the Russian President also criticized Western governments for hostile activities that threaten Russian security.
US Responds to Russia and Ukraine Conflict with Added Sanctions
Following Putin’s incursion into the Donetsk People’s Republic and Luhansk People’s Republic in eastern Ukraine’s Donbas region, the Biden administration swiftly responded with added sanctions on Russia. According to the White House, an executive order is afoot to ban US citizens from engaging in commercial activities with the DNR and LNR. Such commercial activities include investments, trade, and finance. Furthermore, the US government warned that the current measures taken serve as only a prelude for stiffer sanctions planned. The tandem sanctions on standby – also with input from the US’ allies – will be meted out if Russia further escalates.
According to Moscow, Putin consulted with French President Emmanuel Macron and German Chancellor Olaf Scholz on occupying Ukraine. The Kremlin further added that although both leaders expressed disappointment at the Russian President’s decision, they remained committed to continuing diplomatic talks. Furthermore, Ursula von der Leyen, President of the European Commission, also expressed disapproval of Putin’s actions, albeit more vocally. According to her, this is a “blatant violation of international law, the territorial integrity of Ukraine, and the Minsk agreements.”
Oil Prices, Stocks Impacted by Russia’s Movement on Ukraine
Following the Ukraine incursion, there were mixed results in the prices of commodities, securities, and instruments. For instance, oil surged to a seven-year high, safe havens rallied, while US stock futures sank.
Brent crude futures were up 4% to $97.35, the highest since September 2014. Meanwhile, the S&P 500 futures retraced by 2%, while the NASDAQ futures dipped 2.7%. Furthermore, European equities dropped 1.3% in quick fashion to a four-month low, while the Russian ruble slumped. Also, the Russian MOEX equity index declined by 10.5%, while the Australian ASX 200 dropped 1.3% in pre-trading. Markets in the US did not open on Monday.