Benefiting from a commodities supercycle

RUSSIA’s invasion of Ukraine poses profound risks to the global economy, which is already suffering from soaring inflation and supply chain disruptions. Amidst all these uncertainties, we shine a spotlight on the commodities sector.

The war has severe implications because Russia is resource-rich. Russia is the world’s second-largest crude oil exporter, and supplies over 40 per cent of Europe’s natural gas. Sanctions imposed on Russia have driven up energy prices across the world.

Beyond oil and natural gas, Russia is also a leading producer of metals such as aluminium, nickel, copper, and iron. It is also involved in agricultural commodities such as fertilisers. With a massive portion of the world’s fertiliser supply at risk, fertiliser prices have soared. Moreover, Russia is urging domestic producers to reduce exports of fertilisers, stoking fears of further shortages.