A lone gas pipeline could be the key to Russia-Ukraine diplomacy, but sanctions won’t be straightforward

Pressure in the pipeline… and on the border. Quick international-relations refresher: In late January, Russia stationed 100K troops near its border with Ukraine, fueling fears of an invasion. Russian President Putin says his country won’t invade, but the US and Germany have already been debating trade restrictions (aka: sanctions) on Russia for weeks. The goal: prevent invasion. On Monday:

• President Biden met with Germany’s new chancellor, Olaf Scholz, and vowed that Nord Stream 2 — a pipeline that carries gas from Russia to Germany — would be shut down if Russia invaded. Oil exports make up 30% of Russia’s economy, so it would take a hit.
• But Germany is the only country that can shut the Nord, and Scholz avoided confirming that he would. While Germany is a US ally, it relies on the Nord to heat 26M homes.

Regional pipe, global problem… If the US imposes economic sanctions, Russia could retaliate by shutting off all its fuel exports. Since Russia supplies more than a third of the EU’s natural gas, fuel prices across Europe could spike if Russian fuel exports run dry. And if there’s a trade war, other global industries would likely be affected too.

• Fewer planes: Boeing says the standoff threatens to disrupt plane production, since Russia produces titanium and other metals.
• Pricier grains: Global food prices could rise even more, because Russia and Ukraine produce a lot of the world’s wheat and corn.
• Reversed gains: Analysts say rising oil and food prices could exacerbate inflation and slow, or even reverse, global recovery.