01-04 The Ukraine War - John Bulloch

Wars have consequences. Oil that the USA imported from Russian now comes from Venezuela. 400 global companies operating in Russia like McDonalds and Starbucks close their doors. Europe builds LNG ports for receiving liquefied natural gas, and the USA builds LNG ports for exporting natural gas. And nations like Canada and Australia up their capacity to produce and export food grains. And another shocker is the global jump in the price of uranium used for nuclear power stations. Yes, wars have consequences. And we are just beginning to understand how our future is changing.

The Russian invasion of Ukraine has long-term consequences. Nations that were focused on economic growth and international trade and investment are now focused on national security and defense spending. Globalism is quirky.
When the USA cut off imports of Russian oil, the replacement was Venezuela oil. And even Canada can send additional crude oil to America via rail tankers. Or by the approval of the cancelled Keystone XL pipeline.
What is more long-term in its implication is building LNG terminals in Europe for degasifying LNG. There are four under construction and another 20 in the planning stage. And in the USA and Canada, two LNG export terminals are under construction. These are projects that are highly complex and take 2-4 years to complete.
Of equal economic significance are reports that more than 400 global companies have pulled out of Russia. The big names are McDonalds, Coca Cola and Starbucks. But a wide range of industrial and financial institutions means a loss of technology and know-how that Russia depends on.
It is an amusing story to hear that McDonalds in Russia does not have the garbage problem of franchises in the rest of the world. Russians take their cups, straws and bags home.
Perhaps the greatest tragedy associated with the Russian invasion of Ukraine is cutting off Ukraine exports of sunflower oil, wheat, barley and corn. Over time nations like Canada and Australia can make up the loss. But in the meantime, nations dependent on Ukraine food will face starvation. The most vulnerable to food shortages are Egypt. Ethiopia, Lebanon, Yemen and Palestine.
Another global shocker is the jump in world prices for uranium, the fuel used for producing nuclear energy. The big global suppliers are Kazakhstan, Canada and Australia. But Ukraine is the 6th largest global producer. It seems Russia wants Ukraine’s resources. Especially uranium.