According to Moody's, the Russia-Ukraine situation increases risk in practically everything, from European to US growth, while drastically increasing the potential commodities price impacts.

On Thursday, Moody's revealed that the sanctions imposed on Russia have increased risks to the global economic outlook, particularly Europe's economic recovery. "Possible retaliation by Russia in response to sanctions could also cause further energy price shocks, particularly in Europe.”

The European Union had agreed to freeze European assets linked to Russian President Vladimir Putin and Foreign Minister Sergey Lavrov over Moscow's operation in Donbass.

The European decision was accompanied by a wave of sanctions from the US, Europe, and other Western allies.

US oil prices reached their highest level since the 2008 financial crisis, exceeding $116 per barrel, while global benchmark Brent prices climbed to just shy of $120.

Russia supplies 40% of Europe's gas and 10% of the world's oil. Together with Ukraine, they contribute 14% of the world's wheat supply.

With commodity price inflation cited as a primary driver, Moody's said, “Heightened geopolitical risks are unambiguously negative for economic activity," adding that the scale of the effects depends on the severity of the crisis.

 S&P Global downgrades Russia

S&P Global cut Russia's credit rating from "BB-plus" to "CCC-minus".

According to the agency, the downgrade comes after the imposition of measures that will "likely substantially increase the risk of default."

As it maintained the sovereign on negative watch, the rating agency also warned of additional downgrades.