Ukrainian War: The World Economy Is Shaking

• Gas and oil

Russia is one of the world’s leading producers of gas and oil, and investors are panicking about the possibility of a disruption in the supply of hydrocarbons. So far, economic sanctions have avoided the energy sector, but the United States, which is less dependent than Europe because of national production, is currently discussing Russia’s oil import ban. Russia is the second largest oil exporter in the world.

Oil prices, whether in North Sea Brent or US WTI, reached record highs on Monday, temporarily surpassing $ 130 a barrel for the first time since 2008. 345 euros per megawatt hour. The European Union imports 40% of its gas from Russia.

• Agricultural products

Russia, which became one of the world’s leading wheat exporters in 2018 “important” To feed the planet, but Ukraine’s export capacity is also a source of concern. Two countries are one “Cereal shop” For the rest of the world. In Europe, wheat prices have skyrocketed since the beginning of the conflict, reaching an unprecedented price of € 450 per ton on Monday.

To get grain out of the country without going through a port, “(Ukrainian) railway operators want to export wheat, corn and sunflowers to neighboring countries (Romania, Hungary, Slovakia, Poland) through the railway network.”Comment on the broker Inter-Courtage in a note. Other countries, such as Bulgaria, have taken steps to restrict exports, and Hungary has even banned the sale of grain abroad, which has helped tighten supplies in markets that were already very tight before the invasion. ..

“Lebanon relies on Russian and Ukrainian wheat for 50% of its food. This means that in some countries it will be more dramatic than rising prices. There will be a shortage. ..Also, I am afraid of President Christian Lambert of Copacogeka, the first organization to represent European farmers.

According to the specialist company Agritel “Sunflower oil is the greatest danger.”.. Famous for its sunflower fields as far as the eye can see, Ukraine is one of the world’s leading producers of oil seeds and one of the world’s leading oil exporters. “The situation in the global oil market is very tense.”Analyze Sébastien Poncelet, an expert at Agritel.

•metal

Industrial metal “Most exposed” Russia’s sanctions by the international community include aluminum, nickel and palladium, which capital economics believes.

Russian group Rusal is the second largest producer of industrial aluminum in the world. The metal reached a new historic high at $ 4,073.50 per ton on the London Metal Exchange (LME) on Monday. For nickel, there is Norilsk Norilsk, which is run by Vladimir Putinin of the oligarch. In 2019, Russia was the second largest producer of nickel ore after Indonesia and the Philippines, but second only to China in refined nickel.

After the military invasion, Capital Economics estimates that 7% of the world’s refined nickel market has refined the nickel market. “May be affected” By possible sanctions. But the market-breaking metal is one of the most sought after battery factories on the planet that should allow the automotive industry to abandon oil.

Cars are also at the forefront of palladium, which set an absolute record at $ 3,442.47 an ounce, where Russia dominates 50% of the world market. Used in the manufacture of catalytic converters.

Titanium, a metal that is highly regarded by aircraft manufacturers for its light weight and extremely high resistance, is also an indirect issue of conflict. VSMPO-Avisma, a Russian company founded in the Urals in 1941, is the world’s leading aviation supplier, according to Olivier Andries, general manager of aviation engine manufacturer Saffron. “Inventory for several months” Behind him.

Inflation: Compensate for 22 billion

In the face of rising energy prices, the French government plans to spend about € 22 billion on measures to support purchasing power, said Bruno Le Mer, economic minister.Freezing gas prices is expected to be costly “Probably 10 billion euros in 2022 as a whole”He explained on RMC / BFMTV, against the € 1.2 billion budgeted so far. “Upper limit of electricity charges” In turn it costs “8 billion euros and inflation compensation 4 billion euros”..
• Macron promises to “improve” gasoline aid. Presidential candidate, government support for gasoline “Improved” Around “Mileage allowance and inflation allowance approach” To respond quickly to soaring fuel prices.This essence part “We will strengthen the equivalent of mileage allowance, including synchronization.” “There will be supplements made from the petrol portion because it is correct and it must be done. This is avoided with both mileage and inflation approaches.He added.
At the end of January, the government announced a 10% increase in mileage allowance.
“Fuel tax is more appropriate than measures to reduce long-term taxation because it is used to fund our energy conversion.”He continued.