Commodity markets extended their strong runs today, with aluminium, coal and palm oil all hitting new records.
Crude oil and wheat prices also scaled multi-year highs as Russia's invasion of Ukraine disrupted global raw material flows.
Russia's stature as a top supplier in oil, gas, metals, grain and shipping markets has meant that the harsh sanctions applied to several Russian entities following Moscow's invasion of Ukraine has upended several critical resource supply chains.
Aluminium prices on the London Metal Exchange have gained 30% this year.
US wheat futures have surged 25% this week alone as markets attempt to price in the impact of a potential loss of Russian supplies if the international community rolls out additional punitive measures against Moscow.
The US is preparing a sanctions package targeting more Russian oligarchs as well as their companies and assets, two sources familiar with the matter said, as Washington steps up pressure on Russian President Vladimir Putin.
Brent crude oil rose above $118 a barrel for the first time since February 2013 as buyers grappled with financing and shipping issues that have paralysed purchases from the third-largest oil producer this week.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
"Russia's invasion of Ukraine spells further turmoil for global energy markets already reeling from extreme price volatility over the past two years," said Sam Reynolds, an energy finance analyst with the Institute for Energy economics and Financial Analysis, (IEEFA).
Australia's ANZ raised its short-term target for oil to $125 a barrel, adding that supply shortages could see further upside.
In industrial metals, LME aluminium rose 2.3% to an all-time high of $3,650 a tonne, while nickel climbed over 4% to $26,935 a tonne as traders tried to factor in the loss of supply from the third-largest producer of both metals.
For grains, Russia and Ukraine were projected to account for 28.5% of global wheat exports in 2021, according to the US Department of Agriculture, so global wheat prices have jolted higher to try to accommodate a big drop in supplies from both counties.
Chicago wheat futures are up nearly 40% in the past month, and have climbed to 14-year highs of $11.34 a bushel.
Russia and Ukraine also account for 19% of corn exports and 80% of exports of sunflower oil, which competes with soyoil and palm oil.
Malaysian palm oil prices hit record highs of 6,950 ringgit a tonne today, while US soyoil hit its highest since 2008.
Newcastle coal futures have also been on a blistering run since sanctions were slapped on the third-largest exporter, surging to a record $440 a tonne this week, up 100% from a month ago.
