The latest round of U.S. sanctions on Russia and the tragedy of Malaysia Airlines flight MH17 in eastern Ukraine have everyone on edge about tensions on the Russia-Ukraine border.
“Core issues in the Ukraine crisis remain unresolved,” said Deustche Bank analysts Raj Hindocha and Marcos Arana in a presentation before the MH17 incident. “[T]he risk of escalation into a wider regional military conflict can’t be ruled out.”
Hindocha and Arana included this slide laying out three scenarios for the region.
Under their worst-case scenario, warn that “Russia’s relationship with Europe comes into play” with the “Potential for disruption of Russian gas supply to Europe.”
The European Union has substantial trade ties with Russia, and petroleum trade is arguably the most important.