Russia-Ukraine conflict is growing with each passing day. Russian airstrikes on Ukrainian cities have continued. And, this has roiled the commodity markets. Oil and metal supplies are running low now.
Russian commodity exports were hindered as a result of Western sanctions imposed in response to its invasion of Ukraine. As concerns about supply disruption mount, prices of crude oil, aluminium, nickel, and coal rise.
Brent crude oil price rose to level that is close to eight-year highs. Due to supply problems caused by growing Russia-Ukraine hostilities, the price of Brent crude oil jumped to $118 a barrel on March 3, the highest level in over eight years.
Crude oil prices have risen dramatically in the recent week as a result of Russian President Vladimir Putin's decision to launch a military action in Ukraine. The United States last week announced that it is willing to impose sanctions on Russian oil and gas exports.
Russia provides 40% of the gas required by the European Union. On account of delivery, payment issues and supply concerns in the global market, the street is talking about the next target of $121-125-127 per barrel on the charts.
Also Read: Russia-Ukraine crisis fires up commodity prices
However, it isn't just crude that has seen a significant increase; metal prices have also gone high. Nickel has reached a fresh ten-year high. The price of aluminium was at an all-time high. In addition, coal prices reached new highs of $400 per tonne.
While aluminium reached a new high of $3,597 per tonne, nickel rose to a new high of $26,505.
Russia produces 6% of the world's aluminium and 10% of the world's nickel.
In a single day, coal prices touched a fresh high of $400 per tonne, and futures increased $140 per tonne. They were selling for less than $200 per tonne less than a fortnight ago.
Wheat prices also reached multi-year highs as Russia's invasion of Ukraine interrupted global raw material flows and worsened supply shortages. Wheat futures in the United States have risen by 25% this week alone as markets try to price in the impact of a potential loss of Russian supplies if the international community imposes more sanctions against Moscow.
Wheat futures in Chicago have risen over 40% in the last month, to 14-year highs of $11.34 per bushel.
Also Read: A look at how Russia-Ukraine crisis may impact wheat prices
Russia and Ukraine account for about 29% of global wheat exports. According to the United States Department of Agriculture, Russia and Ukraine are expected to account for 28.5 percent of worldwide wheat exports in 2021. Hence global wheat prices have risen to compensate for a significant decline in supplies from both countries.
Also Read: Palm oil becomes costliest vegetable oil as Ukraine war halts sunflower oil supply
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