Liam Halligan: As economic war emerges between East and West - how will you be affected?

Attention is focused – rightly – on the military and humanitarian aspects of this Russia-Ukraine conflict.

But money and finance are a big part of the story – not the source of dramatic film footage, but hugely important nonetheless.

For this is now not just a military but an economic war too – not just between Russia and Ukraine, but Russia and the West. And that has consequences for all of us.

Protesters across Europe have called for the West to throw Russia out of the international banking system known as SWIFT – in a bid to cripple Putin's economy.

The UK, US and Germany have now said that will happen – but that raises serious questions. Will Western Europe still be able to buy energy from Russia – which supplies ten percent of the world’s oil and 40 per cent of Western Europe’s gas.

Some Western security sources privately warn excluding Moscow from Swift could spark a backlash – with Russia and China working together to set up a new global payments system that could dominate Asia. And, if Moscow has no skin in the game, sources say, Swift could be vulnerable to Russian cyberattacks, which could seriously harm the West.

At the centre of this economic war, though, is energy – where China is also heavily involved.

Back in 2019, Moscow and Beijing opened a brand-new gas pipeline running from Russia to China – so Putin can keep selling Russian gas, even if Europe imposes energy sanctions on Russia.

Putin has been pivoting East since he took office more than twenty years ago, collaborating with China to diversify away from the West, as a market for Russian oil and gas.

Until quite recently, all Russian energy pipelines headed West to Europe. But the 3,000 kilometre Power of Siberia pipeline to China is now operational. And it runs alongside the first Russia-China oil pipeline, which opened in 2012.

As Russia and China cement their energy ties, and oil and gas prices spike, that raises big questions about Western energy security.

UK energy giant BP this morning confirmed it would sell its 20pc stake in Russia’s biggest oil company Rosneft. But of more significance to millions of UK households - soaring prices for petrol and electricity as this conflict rages.

The UK’s embryonic fracking industry – which could help boost domestic oil and gas production – has been frozen since 2019. Sites to extract shale gas were prepared from Surrey, to the North-West and Scotland. They are now inactive.

Bowing to environmental campaigners, ministers maintain fracking is dangerous - and should remain illegal. As Western Europe contemplates life without Russian oil and and gas, that view could change.

As East and West enter economic war – how will you be affected?