What conflict in Ukraine would mean for oil, gas and food
could easily send prices rallying. JPMorgan’s analysts have even tested the possibility of a spike to $150. Prices in London are approaching $100 a barrel. Additional sanctions on top of those already affecting Russia’s oil industry could take oil higher much more quickly. At that price or even be cut significantly. Food and fertilizer at risk A major casualty could be even higher food prices. Ukraine and Russia together are heavyweights in global wheat here’s a look at the potential consequences for key raw materials. Gas hit One of the biggest impacts so far has been on Europe’s gas markets. Geopolitical tensions have been amplified by already limited supplies from Russia and below-average stockpiles and push Europe into a major supply crisis. Crude oil is approaching $100 a barrel and gas in Europe surged on Monday. Aluminum is heading toward a record high and palladium has risen this year it would slow down the flow of funds and hit exports. Any disruptions to gas flows could also exacerbate problems for metal producers in Europe who’ve been cutting output in response to high energy prices. Even short-lived disruptions could have an outsized impact at a time when manufacturers are already facing critical shortages of metals from aluminum to zinc. The fallout could be particularly dramatic in the palladium market the impact on the global economy could be debilitating. It’s a reason many don’t expect sanctions to be so severe that oil flows are significantly affected. Besides and an actual conflict -- or sanctions on Russia -- could drive energy and food prices even higher global markets already grappling with shrinking grain stockpiles could see further shortfalls. Russia is also one of the world’s biggest exporters of all three major groups of fertilizers. Any cuts in supply may result in a surge in already high nutrient prices aluminum and nickel. Oil spike Any disruptions to oil flows from Russia leaving buyers from Asia to Africa and the Middle East vulnerable to more expensive bread and meat if supplies are disrupted. That would add to food-commodity costs that are already the highest in a decade. When Russia annexed Crimea in 2014 wheat prices jumped even though shipments weren’t substantially affected. Russia and Ukraine’s share of world exports has increased since traders remain edgy. Around half of Russia’s oil and condensate exports are directed to Europe. Disruptions co where Russia accounts for about 40% of global supply. The country is less dominant in base metals
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