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The War in Ukraine, Russia, and the Price of Gas

Antonio Graceffo

The value of a country’s currency is highly correlated with the GDP. Before the Ukraine invasion, oil and gas accounted for about 21.7 percent of Russia’s GDP. By December, it had dropped to 18 percent of GDP. Although the ruble plummeted, immediately after the invasion, by summer, it had rallied, because it seemed that Europe had not found a way to do without Russian energy. Meanwhile, Ukraine refused to surrender, dragging out the war, handing Russia defeat after defeat, and the sanctions became ever tighter, driving down the value of the ruble.

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