As tensions between Russia and Ukraine escalate, so does the risk of spillover into global commodity markets. A conflict between the two nations and/or harsh sanctions against Russia has the potential to significantly congest commodity markets.



Russia panic in metals!

A scenario in which the West does not react with harsh sanctions against Russia in the event of an invasion of Ukraine may create an environment in which prices rise slightly on commodity markets, despite increased uncertainty in the short term. However, in a scenario where the West is reacting sharply with sanctions targeting key Russian industries, this could have a huge impact on commodity markets. It could potentially lead to a significant supply problem in the energy, metals and agricultural markets, which could trigger serious price increases in the already-anticipated commodity asset class. Even if some industries are not sanctioned, financial sanctions can complicate trade as they prevent payments from being made. It is warned that if Russia and the West come face to face, there may be significant supply problems in the following metals, of which Russia is a major exporter: