Russia-Ukraine conflict: Vladimir Putin in focus amid West's sanctions

With tensions mounting between Russia and Ukraine, the world is focusing on deescalating the situation following President Vladimir Putin's order to deploy troops to eastern Ukraine. All eyes are now on what Putin does next.  

The Russia-Ukraine conflict has intensified over the last two days and Western nations have imposed many sanctions on Russia after it sent its soldiers to eastern Ukraine and inked treaties to establish military installations in two breakaway regions of Luhansk and Donetsk.  

At this moment of climax for the Ukraine crisis, it all boils down to Vladimir Putin's leadership under which Russia has seen two major conflicts - The Crimean war and the Russia-Ukraine conflict.  

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The Russia-Ukraine crisis

In recent weeks, tensions have been escalating between Ukraine and Russia, and on Monday, February 21, Russia recognised the independence of two separatist regions in eastern Ukraine after President Vladimir Putin signed decrees to recognise Ukraine's regions of "Luhansk and Donetsk People's Republics" as "independent". 

The move heightened tensions in the region, intensifying fears of Moscow's invasion of Ukraine. Putin also ordered Russian soldiers into eastern Ukraine in what the Kremlin termed a "peacekeeping" mission in the Moscow-backed regions. 

Russian-backed rebels have been fighting Ukrainian forces in those regions since 2014 and the fears are that military forces could cross Ukraine's borders to occupy the rebel regions recognised by Russia. 

What came before: The Crimean war 

Vladimir Putin came into to sharp world focus in the year 2014 when Russia sent its forces into Ukrainian territory and annexed Crimea post a referendum.   

The war between Russia and Ukraine has been going on for some time with the former aiding rebels in the Donbass region of eastern Ukraine. The situation has worsened now with Russia recognising the rebel regions of Luhansk and Donetsk. Russia has, however, refuted accusations of mulling a full-scale invasion. Following this, Putin is now facing many sanctions from the West.

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Vladimir Putin's demands

The Russian president has demanded that NATO (North Atlantic Treaty Organisation) give up all its military activity in Eastern Europe. This includes the demand for the retreat of NATO battalions from the Baltics and Poland.  

Putin called for NATO to never admit Ukraine as a member. He also demanded a legal guarantee that the western nations, through NATO or any other organisation, will refrain from expansion further eastward. The Russian president further wants nuclear disarmament of the United States (US) in Europe.  

Putin's demands indicate that the US and other NATO member nations would have to withdraw their forces and halt the supply of arms to countries such as Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia.  

Vladimir Putin's politics and presidency  

Born in Leningrad on October 7, 1952, Vladimir Putin started his career as an intelligence officer with KGB in the year 1975. After years of climbing ranks, he was appointed as the First Deputy Chairman of the Government of Saint Petersburg in 1994. 

He organised 'Our Home Russia' - the Saint Petersburg branch of the pro-government, a liberal political party, founded by the then Prime Minister (PM) Viktor Chernomyrdin. Putin was later chosen as the leader of the Saint Petersburg branch.  

In 1999, he was designated as one of three First Deputy Prime Ministers and later the acting PM of the Government of the Russian Federation by erstwhile President Yeltsin. A week later, Putin became a full-time PM. He became the acting President after Yeltsin quit later that year. Putin became Russia's President for the first time on May 7, 2000. He continued in office till 2008 with two successive four-year terms, following which Putin was banned for a third term, according to Russia's constitution. 

He consecutively ran for a third Presidential term in the year 2012 and was re-elected to the office in 2018, after which he brought in a constitutional amendment in 2020 that would allow Putin to run for the presidential elections till 2036.  

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Russia-Ukraine conflict: Impact on global markets

Markets, both domestically and internationally, have remained on the tenterhooks ever since the Russia-Ukraine crisis worsened and the western nations have imposed sanctions on Russia. 
Indian markets: Although the trend is bullish in Indian markets, Tradingo Founder Parth Niyati believes there will be high volatility over the next month due to this crisis. 

According to Niyati, the overall trend is bullish but there may be high volatility over the next month therefore short-term traders should remain light while long-term investors should look at this correction as a buying opportunity. 

He further says, "We are very bullish on capital goods, infrastructure, real estate, banking, consumer goods, and auto ancilliaries space therefore we advise investors to look for buying opportunities in these areas." 

Global markets: In the international markets, however, investors are eyeing safe havens as global stocks tumbled and oil prices surged due to the Ukraine issue. Senior Asia economist at UBP Carlos Casanova says, "we are much closer to military intervention, which of course is going to drive a lot of the risk off sentiment in the markets." 

He further adds that the short-term volatility in the global markets has been caused both by the geopolitical factors and the US Federal Reserve was 'relentless.' He also said that the consequences of this will be - higher oil prices, equity sell off and investors flocking to safe-haven assets like Japanese Yen. 

A recent note by Goldman Sachs stated that there is a scope for risk premia to rise further across all sectors in case a war breaks out between Russia and Ukraine. It further noted that their forecasts on how much the global markets will hinge upon how much the rouble depreciates. "On that basis, the rouble is still more than 10 per cent away from its maximum underevaluation level of the past two decades," analysts Dominic Wilson, Ian Tomb and Kamakshya Trivedi said in a note. 

Will oil prices rise? 

According to Moody's, an escalation in tensions along the Russia-Ukraine border is likely to boost oil prices even higher than what they already are. 

The research firm also believes that the rise in oil prices cannot be sustained over a long period of time "because of economies' limited ability to absorb higher oil costs and continue growing." 

The research firm explains that continuously high oil prices can impact economic growth and fasten the substitution to alternative sources of energy, prompting oil prices to fall back to the reinvestment range eventually. 

It further states, "Geopolitical developments that aggravate supply uncertainty boost oil prices. At around $90/bbl, the oil price already reflects lingering uncertainty about the outcome of US-Iran negotiations, rising risks in the Middle East and tensions on the Ukraine-Russia border."