Russia launches military strikes inside Ukrainian territory

Energy prices on the surge

On Wednesday, Russian President Vladimir Putin authorized a "Special Military Operation" after receiving a formal request for military invasion from the rebels in the eastern region of Ukraine, Business Insider reported. 

Following Putin's televised statement on Russian state TV, Russian troops fired missiles at several cities in Ukraine and the Russian defense ministry claimed that it had taken out military infrastructure at Ukraine's airbases and degraded its air defenses, Reuters reported. Ukrainian media has also reported that Russian troops had landed on the southern port cities of Odessa and Mariupol. 

After Putin's address, global stocks and U.S. bond yields depreciated, while the dollar and especially gold surged, climbing to the highest value of 14 months. Brent oil prices increased by over 6.5 percent and exceeded $100 per barrel for the first time since 2014. Since Europe relies on Russia for about 40 percent of its natural gas supplies, European gas futures spiked 13 percent.

Also, cryptocurrencies somehow lost value, Bitcoin lost more than 18 percent and ether lost more than 22 percent, falling to 35,600 dollars, and 2,387 dollars respectively. 

Reports have emerged on social media about the attacks and devastation in these areas, even though the number of casualties is unknown. 

Mariupol under almost constant bombardment in this video. pic.twitter.com/Rnnd5b5ALk

— Alejandro Alvarez (@aletweetsnews) February 24, 2022

In a statement released by The White House, President Joe Biden said, "President Putin has chosen a premeditated war that will bring a catastrophic loss of life and human suffering. Russia alone is responsible for the death and destruction this attack will bring, and the United States and its Allies and partners will respond in a united and decisive way. The world will hold Russia accountable."

Even as NATO allies provide Ukraine with military support, the U.S. has ruled out sending its own troops to the country for now. It is likely that the U.S. and its allies will impose economic sanctions on Russia. 

Reuters said in its report that NATO allies had already imposed restrictions on Russian banks and even individuals earlier in the week and the invasion would now call for tougher measures. 

A move that will hurt Russia the most is curbs on its ability to export oil and gas to Western countries, a major contributor to its economy. However, such a move will have major backlash in the Western countries as well. Energy prices have already been soaring in Europe and a reduction in supply would push them further up. 

The U.S. has already tapped into its Strategic Petroleum Reserves in the recent past to simmer gas prices at the pump with little effect, Axios reported. With President Biden stating that defending freedom will have costs for us as well, it is likely that the U.S. economy and people brace for fallout from the events in Ukraine.