Ukraine crisis lifts crude oil, natural gas, and grains
Vrasidas Neofytou
Head of Investment Research
Geopolitical risks hit the global financial markets following the U.S administration and its allies warning that Russia may attack Ukraine as soon as this week, urging their citizens to leave the country.
Western leaders have threatened severe financial sanctions against Russia in the event of any invasion into Ukraine, which will have massive and immediate consequences on the Russian economy and commodities exports.
The energy market has benefited from the continued geopolitical tensions in Ukraine and the Middle East, with Brent crude oil climbing up to 96 dollars per barrel, its highest level since 2014 since Russia is the world’s second top oil exporter following Saudi Arabia.
Record low oil inventories, minimum spare capacity, recovering fuel demand, and possible reduction in Russian oil & gas exports are driving up the crude oil price towards the 100 dollars per barrel key psychological level.
European natural gas prices jump to monthly highs as tensions over Ukraine are worsening Europe’s energy crunch, as Russia is Europe’s top source of natural gas, with approximately a third of its exports flowing through Ukraine.
Investors are also worried that military aggression could disrupt the global food security system, as both countries are responsible for 30% of global wheat and corn exports, leading to a deterioration of food inflation around the world.
Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.
