The Russia-Ukraine war, which began with Russia’s full-scale invasion on 24 February 2022, has fundamentally altered the geopolitical and economic landscape of the world. Three years into the conflict, it remains one of the most consequential military confrontations of the 21st century, with daily developments affecting everything from global energy prices to grain markets, currency values to defence budgets.
Current Situation on the Ground
The front lines of the conflict have remained largely static through much of 2024 and into 2025, with intense fighting concentrated in eastern Ukraine’s Donbas region. Russian forces have made incremental gains in certain sectors while Ukrainian defences have held across large stretches of the front. The city of Avdiivka fell to Russian forces in early 2024, representing one of Moscow’s most significant territorial gains in over a year, but subsequent advances have been costly and slow.
Ukraine has responded with long-range drone and missile strikes deep inside Russian territory, including remarkable attacks on oil refineries and military infrastructure hundreds of kilometres from the front. These strikes have demonstrated Ukraine’s growing capability to take the war to Russian soil and have imposed meaningful costs on Russia’s energy infrastructure and war economy.
Human Cost of the Russia-Ukraine War
The human cost of the conflict has been staggering. United Nations estimates suggest civilian casualties have exceeded tens of thousands, with millions more displaced from their homes. Ukraine’s population has experienced the largest displacement crisis in Europe since World War Two, with millions having fled to neighbouring countries, particularly Poland, Germany, the Czech Republic and Romania. Millions more are internally displaced within Ukraine itself.
Military casualties on both sides are difficult to verify independently, but Western intelligence assessments suggest Russia has suffered losses of over 300,000 military personnel killed or wounded, while Ukraine’s casualties, though smaller in absolute numbers, represent a significant proportion of its pre-war military establishment. The economic cost of rebuilding Ukraine is estimated to exceed $500 billion, an unprecedented reconstruction challenge that will occupy international institutions for decades.
Impact on Global Energy Markets
The war’s most immediate economic impact was on global energy markets. Russia is the world’s second-largest oil exporter and was Europe’s primary supplier of natural gas before the invasion. The sanctions imposed by the United States, European Union and their allies, combined with Russia’s own energy weaponisation, triggered an energy crisis that sent European gas prices to record highs and drove inflation across the developed world to levels not seen in forty years.
European countries scrambled to replace Russian energy supplies, dramatically accelerating investment in liquefied natural gas (LNG) import infrastructure, renewable energy and nuclear power. Norway and the United States became key alternative gas suppliers for Europe. While European energy prices have moderated from their 2022 peaks, the structural shift away from Russian energy remains in place and has permanently altered the European energy landscape.
Oil prices surged past $130 per barrel in the immediate aftermath of the invasion before gradually moderating. The G7 and EU imposed a price cap of $60 per barrel on Russian crude oil in December 2022, attempting to reduce Moscow’s revenue while keeping Russian oil flowing to prevent a global supply shock. Russia has managed to maintain its oil export revenues to a considerable degree by redirecting shipments to India and China, both of whom have continued purchasing Russian crude at discounted prices.
Russia-Ukraine War and Indian Business
India’s position in the Russia-Ukraine conflict has been carefully calibrated to protect its national economic interests. India abstained from United Nations resolutions condemning the invasion and has consistently called for dialogue rather than taking sides. This posture has allowed India to dramatically increase its purchases of discounted Russian crude oil, which now accounts for over 35% of India’s total oil imports, up from less than 1% before the war.
The rupee-rouble trade arrangement and the use of alternative payment systems have allowed India-Russia trade to reach record highs despite Western sanctions. Indian companies in sectors including pharmaceuticals, engineering goods and consumer products have found opportunities in Russia as Western companies departed. However, the threat of secondary sanctions from the United States — which could target Indian banks and companies doing business with sanctioned Russian entities — remains a constant concern for Indian businesses operating in this space.
Impact on Global Food Markets
Ukraine and Russia together account for approximately 25-30% of global wheat exports and significant shares of corn, sunflower oil and fertiliser exports. The war severely disrupted Ukrainian grain exports through the Black Sea in its early phase, contributing to a global food price crisis that hit developing countries, particularly in Africa and the Middle East, extremely hard. The UN-brokered Black Sea Grain Initiative allowed exports to resume from mid-2022, but Russia’s withdrawal from the deal in July 2023 created renewed uncertainty.
Western Sanctions and Their Effectiveness
The Western sanctions package imposed on Russia following the invasion is the most extensive in history, targeting the Russian financial system, key industries, individual oligarchs and the country’s central bank foreign exchange reserves. The freezing of approximately $300 billion in Russian central bank assets held in Western financial institutions was a particularly dramatic step that had no modern precedent.
Despite these measures, Russia’s economy has shown considerable resilience, in part because of continued energy revenues, in part because of the shift to trade with non-Western partners, and in part because of the wartime economic mobilisation that has prioritised military production. The Russian economy contracted by only around 2% in 2022, far less than Western predictions, though long-term structural damage from technological exclusion and brain drain continues to accumulate.
What Comes Next
The path to any negotiated settlement remains unclear. Ukraine has consistently stated it will not accept a peace deal that legitimises Russian territorial gains, while Russia shows no sign of abandoning its objectives. Western support for Ukraine — including billions of dollars in military and financial assistance from the United States and European Union — has been crucial to Ukraine’s ability to continue fighting, but political uncertainty about the durability of that support creates strategic uncertainty. The war’s resolution, whenever it comes, will have profound implications for the global security architecture, European defence spending and the future of international sanctions as a foreign policy tool.