From energy to food prices and even inflation, here's how war in Ukraine could impact Canada's economy

It may be a world away and pale in comparison to the human toll, but Russia's decision to invade Ukrainian territory this week will have many direct and indirect impacts on Canada's economy.

The most obvious one is on the price of oil. Russia is an energy superpower, and the prospect of Russian exports of energy products like crude oil and natural gas being limited is weighing heavily on markets.

The European oil benchmark, Brent crude, topped $105 a barrel on Thursday, its highest level since 2014. The predominant North American oil blend, West Texas Intermediate, wasn't far behind, changing hands just shy of $98 a barrel at one point on Thursday.

Short of military intervention, threatening to limit Russian energy exports would be the most powerful weapon that NATO has at its disposal to convince Putin to end his incursion into Ukraine, but because Europe is just as dependent on Russia for oil and gas as Russia is on the revenue from selling it, experts think there's little chance of that happening.

"The White House has gone to great lengths to convey that it will not target the Russian energy sector and exacerbate an already tight supply situation," commodity analyst Helima Croft with RBC Capital Markets said in a note to clients early Thursday.

"Though there have been no physical supply disruptions yet, there are serious concerns that Russia could move to restrict commodity exports in response to U.S. sanctions."

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Russia currently pumps about 10 per cent of the world's supply of crude oil every day.

Ordinarily, one energy giant turning off the taps would open the door to another opening them, but that's unlikely to happen with Canada because pipeline and export capacity for oil and natural gas are already stretched to their limit, said Eric Nuttall, a partner and portfolio manager at Toronto-based investment firm Ninepoint.

"That's an impossibility," Nuttall said in an interview of the prospect of Canada boosting oil exports to take some leverage away from Putin.

Despite sizeable energy resources in Canada's oilsands and U.S. shale, Nuttall says the decision years ago to limit pipeline expansions have limited North America's ability to export as much oil as possible, to the point where both Canada and the U.S. still import oil from overseas.

According to the Canadian Association of Petroleum Producers, Canada imports roughly $550 million worth of crude oil a year from Russia, most of which is consumed in Eastern Canada.

And Nuttall says the U.S. imports even more than that.

"They're basically contributing $66 million a day into the Russian coffers to empower them to launch cruise missiles into Ukraine when they had a safe and reliable supplier to the north," he said of the Biden administration's decision to kill the Keystone XL pipeline once and for all.