Skip to navigationSkip to content

ℹ️ You’re reading Quartz Essentials: quick, engaging outlines of the most important topics affecting the global economy.

The Russia-Ukraine conflict, explained

Everything you need to know about the conflict in Ukraine, and the impacts on the global economy.

People demonstrate against Russian invasion of Ukraine, in Mexico City
Reuters/Luis Cortes
  • Why did Russia invade Ukraine?

    Image copyright: Sergey Bobok / Getty Images

    Russia’s invasion in Ukraine is driven in part by historical and cultural ties to the region.

    • Ukraine was part of the Soviet Union until it collapsed in 1991.
    • Ethnic Russians accounted for 17% of its population at the time the last census was taken in 2001.
    • During the two decades Vladimir Putin has been in power in Russia, he has been focused on bringing Ukraine back into the country’s sphere of influence. 
    • One of Putin’s earlier salvos included calling for a ban on potential Ukrainian membership in the North-Atlantic Treaty Organization (NATO)

    1 of 8
  • How are other countries reacting to Russia’s invasion of Ukraine?

    As many Western countries mobilize around sanctions and other repercussions for Russia, the conflict is also exposing other nations’ ambivalence about the conflict in Ukraine.

    2 of 8
  • What will sanctions do to Russia

    $500 billion: Russia’s foreign currency reserves, most of which has been frozen

    11,000: Member banks in SWIFT

    7: Russian banks blocked from SWIFT

    5%: Percentage of Russia’s GDP that could be affected by a SWIFT ban

    90%: Percentage of Russia’s oil that Transneft transports; its president, Nikolai Tokarev, has been sanctioned with other oligarchs

    3 of 8
  • What is SWIFT, and how does it work?

    The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is a messaging system that allows banks to securely and quickly communicate about cross-border payments. Say Amanda in Canada wants to send money to Marc in the UK…

    1️⃣ She tells her bank the amount to transfer, Marc’s account number, and the SWIFT code of Marc’s bank.

    2️⃣ If the banks have a relationship, the message goes from one to the other. If the banks don’t have a relationship, the message goes through intermediary banks.

    3️⃣ The banks settle the payment. Marc receives his transfer.

    Limiting Russia’s access to SWIFT—as some sanctions have called for—is one part of disconnecting it from the international financial system. But banks have other options.

    4 of 8
  • Which companies are leaving Russia

    A growing number of Western companies are exiting Russia in response to its invasion of Ukraine. Here’s several that have left across three industries:

    • Oil and gas: BP, Shell, ExxonMobil, and others
    • Transportation and shipping: Boeing, Ford, General Motors, Toyota, Maersk, and others
    • Entertainment and technology: Disney, Apple, Warner Media, Sony Pictures, Meta, YouTube, and others

    Meanwhile, some companies are staying put.

    5 of 8
  • Who buys oil from Russia

    Within this category, Russia mostly exports petroleum oils, oils obtained from bituminous minerals, and crude. Top buyers are China and the Netherlands.

    6 of 8
  • What the Russian invasion means for oil

    Both the US and UK will ban Russian oil in response to the war in Ukraine. Unlike other sanctions on Russia, the oil ban is only backed by the two nations, limiting its effects. Still, oil makes up about 3% of the global economy and its widespread use means that any price increase will spread to other goods. Additionally, other oil-producing countries such as Saudi Arabia could see a windfall.

    Where things stand:

    $130: Price per barrel of Brent oil after news of the ban broke

    $185: Price per barrel analysts expect by the end of the year if the war continues

    8%: Share of US oil and petroleum imports from Russia in 2021

    8%: Share of UK oil imports from Russia

    ≤1%: Percent of Russia’s crude oil production both the UK and the US buy

    7 of 8
  • What is an oligarch in Russia?

    Image copyright: Sputnik/Alexei Nikolskyi/Kremlin via Reuters
    Russian President Vladimir Putin and Head of Rostec state conglomerate Sergei Chemezov eat ice cream as they attend an opening of the MAKS 2021 air show in Zhukovsky, outside Moscow, Russia, July 20, 2021.

    In response to the invasion of Ukraine, the US and other countries have imposed sanctions on the Russian elite with close ties to Vladimir Putin.

    Here are a few names to know:

    🛢 Nikolai Tokarev, the president of Transneft, a state-owned oil and gas company responsible for transporting 90% of oil extracted from Russia

    🏦 Boris and Arkady Rotenberg, brothers who co-own Russia’s SMP bank

    ⚔️ Sergei Chemezov, the CEO of state-owned defense conglomerate Rostec and a former KGB agent

    8 of 8