Global commodity prices are rising sharply following Russia’s invasion of Ukraine, owing to aggravated supply chain disruptions due to multiple sanctions imposed on Russia. Russia is a leading supplier of commodities, including oil, gas, grains, fertilizers, and metals. Russia and Ukraine account for more than 30% of global wheat exports. Further, Russia accounts for 10% of global oil production and more than one-third of Europe's natural gas.
As the supply chain crisis intensifies with the West sanctioning major Russian exports, inflation rates are expected to rise further, rising commodity prices. Due to the supply fears, the U.S. oil price benchmark increased more than 6% and hit $116-plus per barrel. Because the U.S. imposed sanctions on Russian oil imports, domestic oil prices are expected to rise further. In addition, wheat prices rose almost 40% this month. And the price of thermal coal used in power plants climbed to more than $400 per ton.
