Russia-Ukraine Conflict: Supply Chain Impacts

Russia-Ukraine Conflict: Supply Chain Impacts

TLP: WHITE

Standing Intelligence Requirements

For the most up-to-date list of ZeroFox Threat Research’s Intelligence Requirements, please visit:

https://cloud.zerofox.com/alpha_team/advisories/14956

Link to Download

• https://zf-dashboard-media.s3.amazonaws.com/intel/Russia-Ukraine+Conflict+-+Supply+Chain+Impacts+March+2+2022.pdf

Scope Note

This Intelligence Brief focuses on the various supply chain impacts resulting from the current Russia-Ukraine conflict.

Executive Summary

The primary considerations for supply chains will be the valuable commodities produced by Russia and Ukraine and the impacts the Russia-Ukraine conflict will have on the already beleaguered global trade network. Russia is a major energy producer, and the conflict will worsen the energy price surge; Ukraine is an agricultural superpower, and the conflict will limit food supplies—both of which will worsen global inflation. The conflict also will exacerbate supply chain problems like shortages, high shipping costs, and backed-up ports that have plagued global trade since the start of the pandemic.

Key Findings

• Russia’s invasion of Ukraine is threatening supply chains that have still not recovered from the COVID-19 pandemic.
• This conflict will likely accelerate inflation, hurt financial markets, and slow the economic recovery for consumers worldwide—first in energy-dependent Europe, then in Africa, the Middle East, and Asia, all of which depend on Russia and Ukraine for food. However, no region will be immune, as nearly every country relies on Russian or Ukrainian commodities for vital sectors.
• It will be more difficult and expensive to get vital commodities like oil, which is over USD 110 a barrel, and liquified natural gas (LNG), which increased in price by 60 percent since the conflict broke out
• Russia and Ukraine’s geographic location also exacerbates global supply chain problems, as it links Europe and Asia by land and air; the crisis also exposes vital shipping routes to conflict.
• Transportation will now have new and dangerous obstacles to contend with, in addition to closed airspace—which will make trade difficult and more expensive.
• With Western sanctions more drastic than originally forecasted, anticipate additional economic drags from weaker consumer confidence that will hurt already fragile economies.
• The longer-term effects of the sanctions against Russia are already starting to become clear, and Western companies and investors are backing away from the country.
• The next few weeks will determine whether the global economy enters the worst-case scenario: a global recession with accompanying stagflation.

Disclaimer Note

ZeroFox Intelligence is derived from a variety of sources, including—but not limited to—curated open-source accesses, vetted social media, proprietary data sources, and direct access to threat actors and groups through covert communication channels. Information relied upon to complete any report cannot always be independently verified. As such, ZeroFox applies rigorous analytic standards and tradecraft in accordance with best practices and includes caveat language and source citations to clearly identify the veracity of our Intelligence reporting and substantiate our assessments and recommendations. All sources used in this particular Intelligence product were identified prior to 10:00 AM (EST) on March 2, 2022; per cyber hygiene best practices, caution is advised when clicking on any third-party links.

Please note that this information is current as of the ZeroFox Intelligence collection conclusion at 10:00 AM (EST) on March 2, 2022.