This is how Russia is choking the global economy as it continues war on Ukraine

Markets around the globe took a jolt as fear rises of a potential invasion by Russia into Ukraine, which, as experts say, maybe a catalyst to war. Russian President Vladimir Putin recognised two separatist regions in eastern Ukraine and ordered his military to 'maintain peace' there.

First Impact: Feeling the chill - gas supply

Russia is a very large natural gas producer, most of that exported natural gas going to Europe. Europe relies on Russia for over 35% of its natural gas, mostly coming through pipelines which cross Belarus and Poland to Germany, Nord Stream 1 which goes directly to Germany, and others through Ukraine. Germany buys up to 55% of its natural gas from Russia and much of that gas goes through Ukraine or Belarus via Poland. Energy prices in the European Union's most populous country and biggest economy Germany were up 69% in the month of December (YoY). Russian military action in Ukraine would be likely to push them even higher.

Putin and your petrol bill

And it is not just Germany that will feel the chill, Putin has the powers to affect your petrol bill too. Russia is the second-largest crude oil exporter after Saudi Arabia. Ukraine is a transit route for a lot of that oil to move into other economies. As per data available nealrly 12 million metric tonnes of oil was movied for export via Ukraine last year. JPMorgan said the tensions risked a "material spike" in oil prices, while Goldman Sachs is betting on the black gold moving to $100 soon.

The commodity chaos

Russia is also the largest aluminium producer, after China. Russian primary aluminium production makes up around 6% of global output, and 15% of ex-China output. This could add pressure to an already strained global supply chain.

Moving focus to the soft commodities, Ukraine is projected to be the world's third largest exporter of corn and fourth largest exporter of wheat, according to International Grains Council data. Russia is also the world's top wheat exporter. Any supply hit could send inflation shocks to global economies struggling to get back after two years of the pandemic.