Russia and Ukraine

We normally do not comment on international affairs, but we feel it is important to give our thoughts on the possible Russia/Ukraine conflict. 

First off, we do not believe that the US will enter a war with Russia, even if Russia does invade or annex part of the Ukraine.  While there is an awful lot of jawboning coming from the Biden administration, there has been little to no physical activity with our troops and military that would signal an entrance to war.  Additionally, most of the rhetoric coming from the US is about sanctions and economic action against Russia, which is the most likely outcome if they decide to invade.

Russia has some strategic need to get direct access to its Naval base in Crimea, which is what the annexation of Crimea was about in the last skirmish.  While we do not know whether Putin will escalate, we do know that in the past, economic sanctions did not seem to really change the decisions coming from the Kremlin.  The US does not have many tools here to fight a battle for Ukraine as the country does not offer much in terms of strategic need for the US.      

The final point is: if Russia moves in, what will be the economic impact and how will that affect markets? The simple answer is, whatever effect it has will be temporary. In almost every major event/crisis, the immediate reaction is negative followed by a resumption.  We believe if there is a selloff, that would be a buying opportunity. However, there will be some impacts in the oil and gas world for some period of time. 

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