Commodity markets have been under immense pressure since Russia’s invasion of Ukraine due to a slew of economic sanctions imposed on one of the world’s largest commodity exporters and worsening supply chain disruptions. Russia is the second-largest exporter of crude oil and the leading exporter of several crops, coal, gold, and steel-based products. The import embargoes on Russia have significantly impacted the supply of such commodities to the global economy, causing commodity prices to surge over the past month. Furthermore, due to the destruction of infrastructure and the displacement of civilians, commodity exports from Ukraine have halted since the Russian invasion, worsening the commodity shortage.
Due to a resurgence of COVID-19 cases, commodity prices are expected to rally further in the near term with lockdowns in China. In addition, a global oil shock could aggravate the already volatile commodity markets, as several European nations explore a potential ban on Russian oil in the wake of increased war crimes allegedly committed by the country.
