Unfortunately, a quick end to the Ukraine war is not in sight. The human suffering is assuming ever greater proportions. It is to be expected that the sanctions could also be further tightened.
Russia, as intended, has been hit hardest by the sanctions so far. But the risks for the global economy are increasing, especially in the event of a further tightening of the sanctions. Europe, with its geographically increased ties to the parties involved in the conflict, is the most exposed to the uncertainties.
The rise in oil and gas prices is particularly striking. At the beginning of the week, North Sea oil traded at times above 130 US dollars per barrel, more than 60 percent higher than at the end of 2021. The high energy prices are being felt all over the world. On the one hand, consumers have less money available for other expenses after buying petrol or heating oil. The margins of companies are also threatened in such an environment in view of rising purchase prices. On the other hand, high energy prices further complicate the task of central banks. They should actually be actively fighting inflation now, especially since the new price shock has significantly increased the danger of inflation. But at the same time, the scope for action is shrinking due to the increased economic risks.