Impact of Russia–Ukraine War on Global Commodity Markets

The Russia-Ukraine conflict has had rapid and extensive effects on global commodity markets. Both nations stand amongst the world's largest commodity exporters, with global influence over critical commodities such as natural gas, oil, metals, wheat, etc. Whereas Russia is a key supplier of oil, natural gas, coal, aluminum and wheat, Ukraine is a key exporter of wheat and oilseeds

The ongoing conflict and unprecedented sanctions towards Russia have resulted in record-high inflation levels across developed and developing regions, disrupted supply chain, and severely impacted global economic recovery from the COVID-19 pandemic. Notably, prices of many essential and industrial commodities have been skyrocketing since February 2022, surpassing the peak in 2008 during the global financial crisis.

With expectations of these geopolitical tensions to continue, energy and food prices are forecasted to stay elevated in short to medium term period. This is evident as global growth forecasts have been cut and economic indicators suggest a drop in activity as nations grapple with tightening markets.