When Russia struck a deal with Ukraine on July 15, there was hope that millions of tons of food would once again be able to flow from the embattled country. Under the agreement, brokered by Turkey and the UN, Russia would lift naval blockades and allow large-scale shipments of grain to leave Ukraine’s ports.                                                  

But only a day later, Russia’s commitment to the deal was thrown into question when its military launched missiles at the major port of Odesa. The attack renewed concerns that Ukraine’s grain exports will remain stuck—offering no reprieve for the world’s growing hunger crisis. 

The war in Ukraine is a stark illustration that in our highly interdependent world, regional conflicts can bear tectonic consequences—from large-scale hunger to a sharpened focus on energy security. But the global fallout has also underscored how the economic, security, and humanitarian profiles of countries make them vulnerable to these worldwide shocks in different ways.

In ECSP’s new Wilson Quarterly piece, Director Lauren Risi and ECSP advisor Sharon Burke investigate the way disruptions in natural resource supply chains have rippled out from the epicenter of the crisis to places thousands of miles away. The article also reveals how, in some countries even far from Ukraine, these disruptions are combining with other stressors to threaten human security. 

Russia, Ukraine, and Their Neighbors

“The Urgency of Opportunity: Russia’s War on Natural Resources” looks at concentric circles of impact, starting with Russia, Ukraine, and their immediate neighbors. Burke and Risi show how Russia’s deliberate attacks on agricultural infrastructure and port blockades have dealt Ukraine’s agricultural sector a huge blow: Half of the current harvest could be lost and “farmers are strapped for cash going into the next growing season.”

Because agriculture contributes significantly to  Ukraine’s GDP, this agricultural slowdown has wider economic repercussions. “The Ukrainian economy is expected to shrink by 40 percent this year,” say Burke and Risi. Russia has also reportedly stolen—and then sold—hundreds of tons of wheat from Ukraine. 

Meanwhile, there are concerns that the suite of sanctions on Russia and Belarus—even though they exclude agricultural products—might be currently impacting food and fertilizers exports out of the two countries as companies there face greater logistical and financial barriers.   

Agriculture is not the only natural resource sector in the region directly blunted by the war, however. Ukraine possesses large uranium, graphite, titanium, and lithium oxide reserves, and mining investments there had been estimated at $10 billion across 24 projects before the war. But the violence has caused some mines to go offline; S&P Global reports that the conflict could even stall Ukraine’s rise as a major graphite producer.

A Ring of Reliant Countries

Beyond the Black Sea, a number of trade partners with Russia and Ukraine are also feeling direct impacts from the war’s disruption of natural resource supplies. Many countries across the globe are reliant on the region for grains, fossil fuels, and agricultural essentials like potassic fertilizers. As interrupted production, blocked exports, sanctions, and other factors limit the flow of these commodities and drive up their price, dependent countries face a slew of challenges that include threats to their energy security and rising levels of hunger at home.

For instance, the European Union has long been reliant on Russian for its energy supplies, and it has continued to make hefty payments for Russian fossil fuels during the war. In response to worries over energy security, the bloc has increased its supply of LNG from the U.S., ratcheted up investments in renewables, and announced it would ban imports of most Russian oil by the end of the year. And while Europe is struggling to shore up reliable and sustainable energy supplies, countries spanning Latin America to South Asia are feeling the dent in Black Sea food and fertilizer exports.  

Russia and Belarus are top suppliers of fertilizers and fertilizer ingredients like potash. From 2018-2020, Russia accounted for more than half of nitrogenous fertilizer imports in Peru (55 percent) and nearly all potassic fertilizer imports in Mali (99 percent). Now, export restrictions and sanctions are posing a challenge for some of these trade partners—in Peru, for example, Bloomberg reports that a shortage of fertilizer could catalyze a hunger crisis.

Other countries are facing food system woes in part because of their dependence on Black Sea grain. Russia and Ukraine are major exporters of wheat, corn, sunflower oil, and barley. Export disruptions for these commodities had an early impact on countries like Egypt—the leading importer of wheat from both Russia and Ukraine—which has banned domestic grain exports since March. Acute food insecurity is also a growing risk for some of Russia and Ukraine’s grain importers. In the Eastern African Region, where wheat is a key part of diets, Russia and Ukraine account for about 75 percent of wheat demand. The area was already seeing high food prices from socio-economic shocks and persistent drought, and the war is likely to drive prices higher and further limit food access, especially for the urban poor. 

Seismic Disruptions

Burke and Risi also describe a third concentric circle of impact: How soaring prices and limited supplies of commodities have wider ripple effects that touch countries not directly reliant on the Black Sea.

Grain market prices were at a 14-year high in March, and FOA’s Food Price Index is still much higher than it was at this time last year. Among the hardest hit by this price surge are people who spend a large percentage of their income on food. In India and Nigeria, for example, 30 percent and 60 percent of consumer spending respectively go to food purchases. High food and energy prices have caused more than 70 million people to fall into poverty since the start of the war. In places where existing economic stressors, political grievances, and social tensions are already eroding stability, higher prices, including elevated food prices, could also contribute to conflict. 

The supply chain disruptions for natural resources from the Black Sea, meanwhile, are prompting countries to look for alternative sources, sometimes with consequences for communities living near yet-unexploited resources. In Brazil, reliance on fertilizer imports (especially Russian potash) is adding pressure to open a mine in Amazonas despite pushback from the Indigenous Maura community. 

By highlighting the cause and effect of natural resource shocks, coverage of the war has offered the average person a better glimpse at the connective tissue of different global systems. Rising fuel prices help drive up the cost of fertilizers, for example, in part because the production of nitrogen fertilizer requires large amounts of natural gas. Rising fertilizer prices, in turn, put upward pressure on food prices as agriculture becomes costlier. Poverty is already climbing, but millions more people could become impoverished as the impact of prices, the pandemic, and inequality compound.

From the widespread devastation in Ukraine to Brazilian farmers struggling with higher input costs, the impacts of Russia’s war have emanated across the globe—triggering an intertwined domino effect in food, fuel, and fertilizer supply chains. Humanitarian action, especially if it incorporates early warning systems, continues to be a critical immediate response.

But as we look to secure a more stable and secure future for all, the conflict offers opportunities to think strategically: How can we make short-term progress with an eye toward long-term resilience and adaptation? How can we diversify supplies of energy, food, and fertilizers to prevent another cascade of global shocks in the future?