Russian’s invasion of Ukraine could remove as much as 1 million barrels per day of oil demand from the global market as human and material costs pile up from the military action, according to industry consultants Rystad Energy. 

Ukraine might lose over 50% of its oil demand if the war persists, with long-term implications inevitable due to infrastructure damage and the speed of getting facilities back online once the war ends, oil market analyst Sofia Guidi Di Sante said in a report. Russia also stands to suffer significantly, although the impact in relative terms will be less at 15-30%. 

Sweeping direct and indirect sanctions imposed by the U.S. and its allies on Russia’s financial system will reduce economic activity significantly, according to the report. Its already reducing the flow of Russian oil to markets at a time when the world has been in a supply deficit. Petroleum markets have been in relentless turmoil since Moscow’s attack, prompting global oil benchmarks to soar toward $110.