This morning, a 40-mile-long Russian armored convoy is heading for Kyiv, and Ukraine says Belarusian troops have also entered the country. Putin’s forces have been pounding residential areas in the northeastern (and predominantly Russian-speaking) city of Kharkiv; Amnesty calls it a war crime. Russia has also reportedly started using cluster bombs and vacuum bombs in Ukraine. The war is about to get far, far uglier, and that’s before taking into account the fact that nuclear war is suddenly a very real threat.

But let us turn our eyes for a moment to the economic impact of the war and the sanctions that have been applied to Russia. Carsten Brzeski, ING Research’s global head of macro, yesterday published a detailed take on this subject, and it’s well worth a read. Here’s what we can expect, per Brzeski:

• Massive spikes in European heating and gas bills.
• Surging food prices.
• Soaring commodity prices that “aggravate already existing inflationary pressures”.
• Shortages of essential metals hitting the auto, electronics and even dental industries.
• More fiscal stimulus, as evidenced by Germany’s decision to vastly increase military spending.

“The world, and particularly Europe, could be facing severe supply disruptions, undermining the industrial rebound and also the private consumption rebound expected with the end of the Omicron restrictions,” Brzeski writes. The stock markets seem to be realizing this too: European markets are substantially down today, and U.S. futures also look set for a fall.

Also worth reading is this piece by the European economic think tank Bruegel, which runs through Europe’s options for getting through next winter without Russian gas, or with very little. In short, a partial reduction in gas flows from Russia would probably benefit Gazprom and sustain Russian leverage, while a complete cut-off would force Europe to reduce annual demand by 10-15%. “This is possible,” write Bruegel’s analysts:

“If the EU is forced or willing to bear the cost, it should be possible to replace Russian gas already for next winter without economic activity being devastated, people freezing, or electricity supply being disrupted. But on the ground, dozens of regulations will have to be revised, usual procedures and operations revisited, a lot of money quickly spent and hard decisions taken. In many cases time will be too short for perfect answers.”

One more recommended read: Russia expert Fiona Hill’s interview in Politico, in which she says Putin absolutely could use nukes, and we’re already in World War III. She also has a lot to say to the business community:

“Right now, everyone who has been doing business in Russia or buying Russian gas and oil has contributed to Putin’s war chest. Our investments are not just boosting business profits, or Russia’s sovereign wealth funds and its longer-term development. They now are literally the fuel for Russia’s invasion of Ukraine…Ordinary companies should make a decision. This is the epitome of ‘ESG’ that companies are saying is their priority right now—upholding standards of good Environmental, Social and Corporate Governance.”

We are already seeing some Western companies divest their Russian interests or suspend their Russian business activities—take a bow, Shell, BP, Equinor, Daimler, and Maersk—but clearly there’s a long way to go.

Finally and very separately, I’d like to steer you toward two new podcasts featuring Alan, who is hopefully enjoying his skiing break. In the latest episode of Leadership Next Ellen McGirt and Alan talk to Larry Culp about GE’s breakup (Apple/Spotify). And in Episode 12 of Sustainability, Inc., Alan and Boston Consulting Group global chair Rich Lesser look back at the series and discuss how to help consumers make sustainable choices.

More news below.

David Meyer
@superglaze
david.meyer@fortune.com

TOP NEWS

Russian stocks

Russian stocks trading outside the country—the Moscow Exchange has been closed since Friday—are tanking. Probably a taste of what to expect when Russia's bourse finally reopens. Bloomberg

Starlink arrives

Well, that was quick—two days after Elon Musk promised them, Starlink terminals from SpaceX have already arrived in Ukraine, allowing the government there to connect to the satellite-based internet network. Fortune

Estee Lauder

Estee Lauder executive group president John Demsey just lost his job over a social-media post that included a racial slur. Demsey had apologized for "the horrible mistake of carelessly reposting a racist meme without reading it beforehand." The cosmetics giant said Demsey's posts "are damaging to our efforts to drive inclusivity both inside and outside our walls, and do not reflect the judgment we expect of our leaders." Fortune

Toyota attack

Toyota had to suspend its Japanese production lines due to a suspected cyberattack on a key supplier. It will probably lose 13,000 cars of output. It's not known whether the attack had anything to do with the Ukraine situation, but the Japanese government is going to see if Russia was involved. Reuters

AROUND THE WATERCOOLER

Pay rises

New research from The Conference Board shows nearly a third of people who quit in the Great Resignation are now making more than 30% more in their new jobs. However, nearly two third of workers are worried about keeping up with inflation. Protocol

EUkraine

Ukrainian President Volodymyr Zelenskyy has signed an application for his country to "immediately" join the EU. The rules for accession aren't quite so simple, and would ordinarily require a long period of negotiation. But influential EU figures want Ukraine in, so it could be at least given a "special track" into candidate status. Politico

Flight plans

Europe and Canada have shut their airspaces to Russian planes, and vice versa. As Fortune's Sophie Mellor explains: "For frequent fliers this means diverted travel paths, canceled flights, and U-turned planes—for now. In the long term, bans would mean a return to Cold War-era flying, with refueling stops in Alaska and much higher ticket prices and flight lengths." Fortune

Tech sanctions

How will Russia deal with the tech sanctions it now finds itself under? "There are two ways out of this tough situation," writes Andrei Soldatov for the independent Moscow Times. "The first is to bring back the time-honored Soviet tradition of stealing Western technology…The second way to make up for shortages in tech is, obviously, to turn to China…That will effectively be the end of the Russian digital sovereignty project, the battle cry of Russian officials and diplomats for so many years." Moscow Times

This edition of CEO Daily was edited by David Meyer.