The first nation-to-nation war in Europe since World War II began late Wednesday evening, with Russian President Vladimir Putin committing to an all-out assault on Ukraine. The continuation of hostilities that began in 2014 with the invasion of Crimea is already costing Russia dearly, however.
What Happened in Ukraine?
Russia continued hostilities against Ukraine at 2 AM GMT, Thursday morning. The initial hostilities were focused on a small-scale land grab in Crimea and a subsequent proxy war in the Donbas region. Russia's current offensive appears to be a full-scale assault on the entire country. Missiles and airstrikes were used to hit cities as near to Russia and Belarus as Kyiv and as far west as Odesa.
Russian troops have begun pushing into Ukraine in the hours since, backed by armored units and ongoing air support.
Ukrainian forces have put up stiff resistance and have reported successful kills against Russian helicopters and jets but report difficulty in the South against Russian troops.
How Has Invading Ukraine Already Stung Russia?
NATO leaders have been very forthcoming with declassified intelligence to forecast Russia's moves, for starters. This is an unprecedented tactic that essentially gave the entire world warning of impending war weeks ahead of time, giving investors and consumers more than enough time to soak it in.
As a result, the invasion didn't even need to begin for Putin's aggression to trigger blowback. Russia's recognition of the Donetsk and Luhansk as independent republics received immediate economic sanctions worldwide, from the US and Canada to Australia and Japan. Members of the international community had been threatening even further-reaching sanctions than have already been enacted should Russia commit to a full-scale assault.
With war now underway, previous uncertainty over sanctions seems to be rapidly spiraling into panic.
The Ruble slipped 3% past an already record low on Thursday morning as the world took in the reality of Russian strikes against Ukraine. Russian bonds and stocks also cratered, with the Russian stock market losing at least a third of its value as the sun rose over Moscow.
What Will Happen Next?
Russia has been forced into rough political-economic waters. Unfortunately, the rest of the world is navigating the same waters.
As I previously wrote, Ukraine is by no means prepared to surrender any more land to Russia. A combination of eight years of military preparation after the seizure of Crimea and strong showings by Ukrainian volunteer fighters have made the country extraordinarily hazardous to long-term occupation. Any long-term war in Ukraine will be a resource drain and a severe one.
A lengthy war will be rough for the global economy, though, given Russia's pre-eminent position as an energy exporter. Already, the Nord 2 pipeline plans have been shelved as retaliation for Russia's attack. With the Black Sea embroiled in conflict, already tight oil supplies will inevitably get tighter.
Western leaders are calling for less energy reliance on Russia, but any transition wouldn't come quick enough to relieve the coming energy crunch, especially amid ongoing pandemic crunches.
