As Ukraine crisis escalates, watch out for these five commodities

U.S. lawmakers have said they are devising the “mother of all sanctions” against Russia as a method of defending Ukraine that would be “crippling to [the Russian] economy.”

The 5 key commodities likely to be hardest hit are:

#1. Aluminum

Russia accounts for approximately 6% of global aluminum supply. While China is the world’s biggest aluminum producer, making about 39 million metric tonnes in 2021, Russia is also a large exporter of the commodity. Aluminum prices have risen about 15% year to date, with prices near multi year highs, but could still rise further.

#2. Oil 

Russia is an oil and gas powerhouse, with the country pumping about 9 million barrels of crude oil a day. In comparison, the U.S. pumps about 11.6 million barrels while global oil production runs to roughly around 96 million barrels per day. Benchmark international crude oil prices are up about 20% year-to-date to trade near seven-year highs, with the oil markets facing supply headwinds.

#3. Natural Gas

Russia is a leading producer of natural gas, pumping about 639 billion cubic meters of natural gas in 2021, or nearly 17% of global production of 3.854 trillion cubic meters as per BP data. European natural gas prices have hit new highs after a pipeline that brings Russian gas to Germany switched flows to the east. Westward gas flows through the 2,607-mile-long Yamal-Europe pipeline, one of the major routes for Russian gas to Europe, have been gradually falling, a move the Kremlin says has no political implications.

#4. Copper 

USGS data shows that Russia produced 920,000 tonnes of refined copper in 2021, about 3.5% of the world total, out of which Nornickel produced 406,841 tonnes. UMMC and Russian Copper Company are the other two major producers, with Asia and Europe being Russia’s key export markets.

#5. Cobalt

According to data from the U.S. Geological Survey (USGS), Russia produced 7,600 tonnes of cobalt last year, more than 4% of the world total. However, Russia was a distant second to the Democratic Republic of Congo which produced 120,000 tonnes.

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