These commodities could become super expensive amid escalating Russia-Ukraine crisis

WION Web Team
New Delhi, India Updated: Feb 22, 2022, 01:07 PM(IST)

Impact of Russia-Ukraine crisis on prices of commodities. Photograph:( Reuters )

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The Russia-Ukraine crisis impacted the prices of some of the commodities worldwide. The prices are expected to rise further 

Russian President Vladimir Putin on Monday (February 21) ordered the deployment of troops to two breakaway regions in eastern Ukraine. 

In a televised address, Putin ordered to despatch Russian peacekeepers to Ukraine's two breakaway regions - the self-proclaimed Donetsk People's Republic and the Lugansk People's Republic. 

The Russia-Ukraine crisis impacted the prices of some of the commodities worldwide. The prices are expected to rise further: Here's a list: 

Gold

Gold prices are already rising globally amid the ongoing conflict and after Putin's latest move to deploy troops to two breakaway regions in eastern Ukraine, the gold hit a near nine-month high on Tuesday (February 22). 

Spot gold XAU= was up 0.2% at $1,909.60 per ounce by 0332 GMT, after scaling its highest since June 1 at $1,913.89 per ounce earlier. US gold futures GCv1 gained 0.6% to $1,911.50. 

Jeffrey Halley, who is a senior market analyst at OANDA, said: "With the situation deteriorating seemingly by the day in Eastern Europe, there is very little reason to be negative on gold at the moment."  

Halley added, "Rising stagflationary pressures around the world are also underpinning the precious metal, a situation that will be exacerbated by massive Western sanctions on Russia if they come to play." 

ALSO READ | US imposes sanctions on two Russian-backed areas in eastern Ukraine

Aluminium

The escalating border tensions between Russia and Ukraine could result in soaring prices of Aluminium as Russia accounts for approximately 6 per cent of the global aluminium supply. 

The conflict could result in a potential supply shock in the aluminium market, which is already tight. 

In recent days, Aluminum prices have risen about 15 per cent till Feb 21. The prices are near multi-year highs and there's a possibility that it could still rise further. 

Christopher LaFemini, who is a Jefferies analyst quoted as saying by Oilprice.com that when the conflict ends, aluminium prices might decline but will rise again because the deficit would persist. 

Oil

After Putin's latest announcement, oil jumped to a seven-year high. Important to note that Russia is an oil and gas powerhouse, as the country is pumping about nine million barrels of crude oil a day. 

Crude - already up more than 20 per cent this year on surging demand - piled higher still on Tuesday, with Brent closing in on the $100 mark for the first time since 2014. 

Hopes of an Iran nuclear deal, which could see Tehran resume global oil exports, were unable to temper the gains. 

The jump in oil is compounding worries about inflation around the world, with the Federal Reserve coming under intense pressure to tighten monetary policy to prevent prices from running out of control. 

ALSO READ | Vladimir Putin orders troops into eastern Ukraine: Key points from his crucial address

Natural gas

The ongoing conflict could result in much higher prices for natural gas as Russia is a leading producer of natural gas. As per BP data, the country pumped about 639 billion cubic meters of natural gas in 2021, which was nearly 17 per cent of global production of 3.854 trillion cubic meters. 

West claims that Russia is using natural gas as a tool to take advantage of the crisis situation. The claims also state that Russia delays in the certification of Nord Stream 2, which is a system of offshore natural gas pipelines in Europe, running under the Baltic Sea from Russia to Germany. 

Copper

Russia produced 920,000 tonnes of refined copper in 2021, which is about 3.5 per cent of the world's total, the USGS data tells.

As per a report by Oilprice.com, UMMC and Russian Copper Company are the other two major producers. Europe and Asia are two major export markets for Russia and the ongoing conflict is likely to impact exports resulting in higher prices globally. 

Cobalt

The Russia-Ukraine conflict could also result in rising prices of Cobalt.

Russia produced 7,600 tonnes of cobalt last year, more than 4 per cent of the world total, as per the data from the US Geological Survey (USGS). 

 

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