Ukraine Crisis Escalates with Closure of Gas Pipeline, Sanctions

The conflict in Ukraine finally spilled over into concrete action, with Germany announcing the suspension of the Nord Stream 2 gas pipeline and the US declaring sanctions on Russia.

Germany said it was halting certification of the Nord Stream 2 gas pipeline, a 750-mile natural gas conduit that runs from Russia to Germany. In response, the benchmark price of natural gas for delivery in Europe next month leaped to about $89.54 per megawatt hour, up from $81.04 at Monday's close. US President Joe Biden also announced that in response to Russia’s continued aggression, the US had closed off Russia from Western financing avenues and imposed personal sanctions on family members of the Kremlin’s inner circle. Other nations joined in, with the UK and Japan also targeting Russian banks, and the EU blacklisting more politicians.

What does this mean for me? 

President Biden has warned that defending freedom will have costs for all nations involved in the crisis effort. He added that the US was working with other major oil-producing countries on a plan to calm prices.

After all the talk of this flashpoint spilling over into the global economy, those fears have now been realized. 

There are several ramifications. As an investor, you should keep a close eye on commodity prices, like oil, natural gas and the total cost of energy. You can also pay attention to the currency strength of the main protagonists, and the overall global fallout on stocks, inflation and consumer prices.