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Access the interactive webinar replay from S&P Global Ratings to hear its analysts and Global Chief Economist's views about the impact of the Russia-Ukraine military conflict and its ripple effect on ratings and the global economy.


Europe’s Energy Supply

Global Energy Market Interconnectedness Complicates Energy Transition: Experts

The increase in European natural gas and power prices being exacerbated by Russia's invasion of Ukraine could create a US manufacturing advantage for a couple of years if domestic power and gas prices remain lower than in Europe, experts said April 1.

To address current energy policy challenges, it is important to look at the origins because it is easy to blame current commodity price increases on Russia's actions, "but let's recall we had an electricity and natural gas crisis in Europe prior to the Russian invasion," Brenda Shaffer, senior advisor for energy at the non-profit research institute Foundation for Defense of Democracies, said during a webinar hosted by Our Energy Policy. OEP is a non-profit energy topic discussion platform.

During winter 2021, a simultaneous cold snap in Asia and Europe made LNG cargoes expensive and hard to find, "and we saw a mini energy transition from natural gas to fuel oil, diesel and coal," Shaffer said.

Although people are focusing on the Russian war in Ukraine as an oil crisis, it is as much an electricity and natural gas price crisis, hitting every market, she said. This will leave the US with a manufacturing advantage for a year or two because energy is the biggest input in that sector, and higher power and gas prices in Europe and Asia will give the US, where those prices are lower, an advantage, Shaffer added.

Energy transition considerations

Shifting the conversation to discuss the energy transition more generally, Yossie Hollander, co-founder and chairman of the Fuel Freedom Foundation, a group dedicated to ending US oil dependence, said the US made a political decision in electricity markets to dial back coal and nuclear development.

That mostly leaves gas and some renewables, "which can never sustain full 100% reliability, so we need to reopen optionality in the electricity market," Hollander said.

For example, Florida has one major natural gas pipeline and without it in a week there would be no electricity in Florida, he said.

Asked about the role of fossil fuels in the transition to cleaner energy, Shaffer said it was important to remove the binary rhetoric of renewables versus fossil fuels because the current generation of renewables works with a baseload of generally fossil fuels.

"It's not like you can have renewables and not be using natural gas and have that baseload running," Shaffer said, adding that she hopes US, and European policy makers will look at treating natural gas differently than the other fossil fuels because "clearly oil and coal are in completely different categories regarding climate impacts."

The adamant opposition to all fossil fuels by some groups risks throwing away something that can lower air pollution in many places, Shaffer said.

"I think we accept the climate imperative and that the energy transition is inevitable, in process and technology is evolving, but we have to be realistic and pragmatic about the timescale over which this change can occur," Dean Foreman, chief economist at the trade and lobbying group American Petroleum Institute, said.

U.S., Europe in talks on additional pressure on Russian energy: White House

U.S. and European leaders are in talks about additional pressure on Russian energy exports as the Biden administration prepares to impose a new round of sanctions this week, White House National Security Adviser Jake Sullivan said April 4.

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Russian Invasion Pits Energy Security Against Energy Transition in U.S.

Security concerns quickly took ahold of the European energy transition following the Ukraine invasion as countries shifted near-term energy policies back in favor of hydrocarbons and nuclear.


Refiners in Europe Seek Alternative Crudes; Aim to Increase Runs

Refiners across Europe are looking for alternative crude supply in the wake of Russia's invasion of Ukraine, with many starting to maximize CDU runs in order to secure better supply as international buyers shun Russian-origin products.


Biden to Announce Joint Action on Enhancing European Energy Security

President Joe Biden will head to Europe March 23 and is expected to join U.S. allies and partners in imposing further sanctions on Russia and tightening existing restrictions to ensure robust enforcement and prevent Russia from evading the severe economic costs imposed for its invasion of Ukraine, National Security Advisor Jake Sullivan told reporters March 22.


EU Plans Proposal to Phase out Russian Fossil Fuels by 2027: von der Leyen

The EU plans to propose phasing out Russian fossil fuels by 2027, according to European Commission President Ursula von der Leyen, as part of measures to improve European energy security.

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Emergency Synchronization of Ukraine Grid 'Days Away': Simson

The emergency synchronization of the Ukraine power grid with continental Europe could be achieved within a few days, EC Energy Commissioner Kadri Simson said March 14.


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Financial Market Pressures

Global Economic Outlook Q2 2022: No Cause For Complacency As The Russia-Ukraine Conflict Modestly Dents Growth

The global economy was in a reasonably strong position in the early months of 2022. The omicron variant of COVID-19 had delivered a sharp but short-lived blow to activity and was in decline almost everywhere. As we had highlighted in our previous S&P Global Economics reports, the health and economic impact of each successive wave of the virus was diminishing. This reflected relatively widespread vaccinations, particularly in the advanced and middle-income economies, as well as governments, firms, and households learning how to manage and live with the virus.

While the observed pace of activity was strong, the economic recovery from the pandemic remained incomplete. Although the "Big Three" economies--the U.S., China, and the eurozone--had all regained their pre-pandemic output levels, they were still below their pre-pandemic paths. The gap between the advanced and emerging markets was wide, with many economies in the latter group likely to suffer lasting damage to their output.

The final piece of the early 2022 picture was the continuing rise in inflation. This was particularly the case in the U.S., where the Federal Reserve dropped the word "transitory" from its narrative and increasingly signaled that it would need to move aggressively to head off inflation pressures that appeared more domestically than externally driven, owing to energy and supply-chain effects. While the Fed's about-face reverberated through markets (although much of the expected action had already been priced in), the upside was that inflation pressures reflected a robust recovery, including the effectiveness--and perhaps over-effectiveness--of fiscal policy.

Meanwhile, however, the eurozone was feeling notably less pressure, despite an equally robust rebound. This is due to less demand-driven fiscal policy and a smoother recovery of the labor market that is containing wage pressures.

Impact From The Russia-Ukraine Conflict

The Russian invasion of Ukraine on Feb. 24 has dominated the macro narrative for the past month. Although the economic effects are moderate on balance so far, it is doubtful we have seen the full impact, and the risks are clearly on the downside.

We have identified the following four channels through which the conflict could affect macroeconomic outcomes:

Direct economic links to Russia and Ukraine. Russian and Ukrainian production and GDP will both fall sharply as a result of the conflict. Any disruption of production will have direct effects on the trading partners of the two countries. These effects will likely follow a "gravity model," where the economies geographically closest will feel the biggest impact in terms of quantity.

Higher energy and commodity prices. Price effects will matter greatly as well. The conflict has added fuel to the fire of already elevated energy and commodity prices. For instance, West Texas Intermediate crude had risen to $95 per barrel on the day the invasion started from $75 per barrel at end-2021, and since has made a quite volatile rise to around $120 in late March 2022. Energy and commodity price changes are net zero on one level, since every buyer corresponds to a seller and every importer corresponds to an exporter. But higher prices destroy demand because users spend more than producers.

Confidence effects. These are indirect effects and less precisely measured. Lower confidence will make households more cautious and therefore scale back or defer their discretionary spending plans, including for big-ticket items, renovations, and vacations. This, in turn, will lead firms to dial back or defer capital expenditure plans. This decline in private demand will reduce growth.

Policy responses. There are two components here. First, we have updated our fed funds rate forecast to include six more hikes this year (with a 50-basis-point hike likely in May), plus four more next year. This will take the policy rate above the 2.50% neutral level. Second, we are assuming a fiscal policy response in China aimed at negating any downside effects on growth from the Russia-Ukraine conflict, in light of the high weight authorities place on stability and Premier Li Keqiang's recent announcement of a 5.5% approximate GDP growth target this year.

Insurers' $15B Russia Aviation Puzzle Will Take Years to Solve

Insurers are facing a yearslong legal battle with aircraft leasing firms over a potential $15 billion claims bill from jets stranded in Russia because of the Ukraine war.


Sovereign Debt 2022: Borrowing Will Stay High On Pandemic And Geopolitical Tensions

S&P Global Ratings estimates sovereign borrowing will reach $10.4 trillion in 2022, nearly one-third above the average before the COVID-19 pandemic.


Credit Trends: Global Credit Markets Update: Q2 2022

Market volatility has led to a pause in debt issuance--particularly at the lower end of the credit spectrum.


Middle East And African Banks: Varied Exposure To Russia-Ukraine Conflict

S&P Global Ratings expects rated banks across the Middle East and Africa to suffer little direct fallout from the Russia-Ukraine conflict due to their limited dealings with Russian and Ukrainian counterparties.


Russia Faces Struggle to Pay Bondholders – Rating Firms

Russia is in danger of defaulting on sovereign debt due to sanctions related to its invasion of Ukraine, rating agencies have warned.


More Than 80% of Russia's Banking Sector Subject to Sanctions Over Ukraine War

The vast majority of Russia's commercial banking sector is subject to international sanctions as a result of the country's invasion of Ukraine, S&P Global Market Intelligence data shows.


U.S. Insurers Have Little Investment Exposure to Russia

U.S.-based insurance companies do not have much exposure to Russian securities, according to an S&P Global Market Intelligence analysis of regulatory statements.


Default Risk Surges for Russian Companies Exposed to International Exchanges

The risk of default for Russian companies listed primarily on international stock exchanges has skyrocketed in the wake of the invasion of Ukraine.


Leased Aircraft Stranded In Russia: The Focus Turns To Insurance

Aircraft leasing companies have mostly been blocked by the Russian government from repossessing planes leased to Russian airlines.


Russia is looking to increase energy links with alternative partners after the U.S. and European governments moved to drastically reduce cooperation with Russia, following its invasion of Ukraine.


China's Evolving Role

Key China-Russia Oil and Gas Deals, Joint Projects and Energy Investments

Energy supply diversification to China has been at the core of Russia's eastern pivot, while Russian gas is central to China's energy diversification away from the Middle East and Australia.

Russia has become the third-largest natural gas supplier to China, including both pipeline gas and LNG, and is currently its second-largest crude supplier after Saudi Arabia, making Beijing's geopolitical stance -- somewhere between Moscow and Washington -- increasingly important in the ongoing conflict between Russia and Ukraine.

When the preliminary Power of Siberia gas pipeline deal was signed in 2014, the spot price of LNG was around $10.50/MMBtu. But prices have risen manifold since then, making pipeline gas much cheaper for China. Economics alone will make it tougher for Beijing to cut Russian gas supply.

Still, China will have to consider its options, given its own exposure to the US and global financial systems in the event of secondary sanctions. Alternatively, turmoil in Russia gives Beijing leverage in both energy and financial markets.


- Spot Asian LNG prices hit a record high twice within a span of a week. On March 3, the Platts JKM for April deliveries touched $59.672/MMBtu. On Mar. 7, Platts JKM rose 79.21% from a day earlier to $84.762/MMBtu, registering the single largest daily jump in the price assessment, according to S&P Global Commodity Insights data.

Trade Flows

- Russia is the third-largest natural gas supplier to China, including both pipeline gas and LNG. Russian natural gas accounted for around 10% of China's total gas imports of 121 million mt in 2021, against 25.9% and 19.8% from Australia and Turkmenistan, respectively.

- Russia exported 12.145 million mt of natural gas, comprising 4.61 million mt of LNG and 7.54 million mt of pipeline gas in 2021, according to China's General Administration of Customs. The total volume rose 51% year on year, with LNG imports falling 9.8%, while pipeline gas imports rose 154%.

- Russia is the second-largest crude supplier to China after Saudi Arabia. It delivered 1.6 million b/d of crude in 2021, customs data showed, down 4.6% year on year. But Russia's share increased slightly to 15.5% from 15.4% in 2020. China cut overall crude imports by 5.1% to 10.3 million b/d in 2021.

- State-owned China National Petroleum Corp (CNPC) and Russia's Gazprom signed a 30-year sales and purchase agreement in May 2014, for 38 Bcm/year of natural gas supplied via the Power of Siberia gas pipeline.

- The Power of Siberia line started supplying gas to China from Dec. 2, 2019, and volume has reached 43 million cu m/day or around 15 Bcm/year since December 2021. Volumes through the pipeline, which is called the China-Russia natural gas pipeline eastern route in China, is expected to reach 38 Bcm/year after the third section of the Chinese portion is completed in 2023.

Low-Priced Russian Urals Crude Cargoes Attract Chinese Buyers for June Deliveries

Several Chinese state-owned refiners have returned to the Russian spot market to buy May-loading Urals crude barrels, attracted by their record discount to Dated Brent, refining sources told S&P Global Commodity Insights March 22.


Break From Russian Oil, Gas Sends West Toward China-Dominated Renewables

Russia's invasion of Ukraine is creating an opening for the renewable energy industry to grab market share as countries look to cut their dependence on fossil fuels, but the shift may do little to boost energy security without strategic investments in green energy supply chains.


A Look at Key Russia-China Crude Oil Ties as Ukraine Crisis Rages

Russia's invasion of Ukraine has seen some of the harshest sanctions ever imposed on a nation and disrupted trade flows of energy and other commodities, even though such goods have not been directly sanctioned.

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Russia Eyes China as New Outlet for Polymers Amid Economic Sanctions

Russian polymer producers are eyeing China as a new outlet as economic sanctions imposed in response to its invasion of Ukraine stem sales in Europe, market sources said March 9.

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A Look at Key Russia-China crude oil ties as Ukraine crisis rages

Russia's invasion of Ukraine has seen some of the harshest sanctions ever imposed on a nation and disrupted trade flows of energy and other commodities, even though such goods have not been directly sanctioned.

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Russian Metals Industry's Reliance on China Set to Rise as Sanctions Disrupt Supplies

Russia's metals industry is expected to lean on China as an export market following sanctions for its invasion of Ukraine.

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Sanctions Against Russia

OPEC+ Crude Production Falls as Sanctions Take Bite Out of Russia: S&P Global Survey

Crude oil production by OPEC and its allies fell in March from February for the first time in more than a year, the latest S&P Global Commodity Insights survey found, contributing to a tightening market thrown in flux by the Russia-Ukraine war.

Western sanctions began biting into primary non-OPEC partner Russia's oil flows, and sizable disruptions in Kazakhstan and Libya also led the coalition's production lower, the survey found.

OPEC's 13 members raised output by 60,000 b/d to 28.73 million b/d, but that was more than offset by a 160,000 b/d decline by the bloc's nine allies, who pumped 13.91 million b/d.

With the net decline of 100,000 b/d, the widening gap between the OPEC+ production and quotas jumped to a record-high 1.24 million b/d—casting further doubt on the group's ability to meet growing global oil demand, which many analysts expect to return to pre-pandemic levels in 2022.

The drop was the first since February 2021, when Saudi Arabia instituted a unilateral voluntary 1 million b/d cut to help prop up the market that at the time was still wobbly from resurgent coronavirus cases.

Since August, with the global economy on firmer footing, the producer group has stuck to a plan of gradually raising quotas by 400,000 b/d each month but has faced mounting pressure from the US, India, Japan, and other major oil-consuming nations for accelerated supplies to cool off rising energy prices.

But several countries have not hit their output targets in months, and March's shortfall resulted in a compliance figure of 148% for the 19 members with quotas, according to S&P Global calculations. Iran, Libya, and Venezuela are exempt from quotas under the OPEC+ agreement.

Concerns over OPEC+ production capabilities, in combination with the Russia-Ukraine war and recovering oil demand, have helped lift the Platts Dated Brent benchmark to nearly $140/b in recent weeks, although it dropped to $98.28/b April 7 as the International Energy Agency announced a 120 million barrel stock release from strategic petroleum reserves, led by the US. OPEC+ officials have attributed the volatility to geopolitics, and not market fundamentals.

Production woes

OPEC kingpin Saudi Arabia, one of just a handful of countries that appears to hold significant spare capacity, kept its production steady in March at 10.25 million b/d, the survey found. Ship-tracking data indicated its exports fell during the month, but several analysts surveyed cited increased refinery runs and said storage volumes may have also increased.

Non-OPEC leader Russia, hit by western sanctions targeting its financial sector, saw its crude production fall to 10.04 million b/d, the survey found. Many traders have stopped transacting with Russian commodities, and analysts expect production shut-ins to build up in April and May, though some flows are shifting to Asian customers.

Biden Signs Bill to Suspend Normal Trade Status with Russia

U.S. President Joe Biden signed a bill late April 8 to suspend normal trade relations with Russia, a move which will increase duties at varying rates on U.S. metal products and other imports from Russia.


Europe's Sanction on Russian Coal Fosters Call of Duty Toward Energy Transition

As the flow of coal from Russia to Europe trickles down to a stop, the immediate concern is replacing the Russian thermal coal, but the focus on transition to greener sources of energy has gained attention at the same time, market sources told S&P Global Commodity Insights.


EU Sanctions 'Minefield' Seen Curbing More Russian Oil Trade Next Month

EU sanctions on Russia are expected to further crimp purchases of its oil and gas next month, as traders shy away from deals due to ambiguous wording and growing unease over sourcing Russian commodities, according to traders and legal experts.


Japan to Impose Ban on Russian Coal Imports Following G-7 Pledge: PM

Japan will impose a ban on coal imports as part of additional sanctions against Russia following the latest commitment by leaders of the G-7 nations, Prime Minister Fumio Kishida said April 8, marking the country's first commitment to curb any commodity imports from Russia.


Infographic: Sanctions on Russian Energy and Commodities Explained

Russia's invasion of Ukraine has triggered an unprecedented wave of sanctions against Moscow which are rippling through global commodity markets.


G7 Nations Vow to Expedite Efforts to Curb Russian Oil, Coal Dependence

G7 nations aim to expedite efforts to cut reliance on Russian energy, including phasing out and banning Russian coal imports and cutting Russian oil dependency, leaders said in a joint statement April 7.


Sanctions Against Russia — A Timeline

We’ve compiled a select list of sanctions issued against the Russian government, Russian companies and Russian individuals since the invasion of Ukraine began, with dates and the issuing government. This timeline will be updated as new sanctions are announced.


In response to Russia’s invasion of Ukraine, S&P Global Ratings continues to assess the effect on economies, markets, and credit.


Effects on Oil

Infographic: Who Is Paying the Price of the Shortage of Diesel Fuel from Russia?

Sanctions and boycotts on Russian oil over its war in Ukraine are heaping more pressure on global diesel markets which were already running low on stocks as demand rebounds from the COVID-19 pandemic. As traders scramble to source alternative supplies, diesel cracks have soared to record highs, far outpacing price rises for gasoline and other fuels. Europe is by far the biggest casualty of lower Russian diesel exports, which account for about half the region's total diesel imports or some 700,000 b/d.

German Plants Face Challenge to Replace Russian Crude

German refiners are facing a 'major challenge' to replace imports of Russian crude by the year end after Europe's biggest economy and world's second largest buyer of Russian oil revealed plans to phase out almost all Russian supplies by the end of this year.


Ukraine Increasingly Stretched for Fuel After Infrastructure Assault

War-torn Ukraine is increasingly reliant on fuel supplies via truck from Poland following the destruction of up to 20 major fuel depots, damage to its main refinery, and the cutting of Black Sea shipping routes, Ukrainian experts say.


Russian, Belarus Refiners Cut Runs on Mounting Stocks, Sanctions

Refineries in Russia and Belarus are reducing throughput, with some halting production, as they have been unable to place their output due to the reluctance of international buyers to take Russian-origin cargoes following Moscow's invasion of Ukraine.


For Asia-Pacific, the biggest risk of the Ukraine conflict is market volatility and higher commodity prices; emerging economies with large energy imports are most at risk.


Implications for Gas

Qatar Leverages its LNG Goals with Gas Diplomacy Amid War

With the West's relations with OPEC stalwarts Saudi Arabia and the UAE on rocky ground, neighboring gas giant Qatar's warming ties with the US and Europe are a sign of shifting energy alliances.

Even before the Ukraine war had Europe scrambling for alternatives for Russia's oil and natural gas, Qatar's ambitions to grow its LNG business were coinciding with burgeoning energy demand by western countries amid the recovery from the pandemic.

In January, Qatar's emir secured the first head-of-state visit to the White House in 2022. President Joe Biden designated the nation a "major non-NATO ally" and the US and Qatari energy ministers discussed enhancing energy relations at the CERAWeek by S&P Global conference in early March.

At the same time, Saudi Arabia and the UAE had ignored US requests for more oil to cool gasoline prices, the top driver of record high inflation, dismayed by the cognitive dissonance of the Biden Administration's climate activism.

The Saudis and the Emiratis also consider the US response to intensifying attacks by Yemen's Iran-backed Houthi rebels, often targeting vital oil infrastructure, as insufficient, and they continue to sound alarms over the Biden Administration's attempts to revive the nuclear deal that would end sanctions on Tehran's energy industry.

Redrawing map

"The Ukraine war is redrawing the global friends and foes map, so we might be entering a new energy phase here," said Vandana Hari, CEO of Vanda Insights. "The US wooing Qatar sits nicely in the context of the US trying to secure more avenues of gas for Europe to replace Russian molecules."

Qatar was the biggest LNG exporter globally last year with total supplies amounting to 110.2 Bcm of gas equivalent, according to S&P Global data. It was followed by Australia (107.2 Bcm) and the US (96.3 Bcm).

Qatar currently produces about 77 million mt/year of LNG and is expanding its giant North Field to boost capacity to 126 million mt/year in the coming years. Qatar is also the majority owner of the Golden Pass LNG terminal in Texas with partner ExxonMobil. The site has an authorized export capacity of up to 18.1 million mt/year. The $10 billion project is expected to start up in 2024.

Qatar quit OPEC at the end of 2018 to focus on its gas ambitions. At the time, OPEC kingpin Saudi Arabia and the UAE were leading a trade embargo against Qatar in a political dispute. Relations were restored in January 2021.

Surging Power, Gas Prices Push European Hydrogen Production Costs Higher in March

Soaring feedstock gas and power prices following Russia's invasion of Ukraine on Feb. 24 have sent hydrogen price assessments sharply higher in Europe, underlining the region's potential for imports of the renewable energy carrier.


Qatar in Talks to Provide Long-Term Supply of LNG to Germany

Germany hopes to lock down a long-term LNG import deal with LNG powerhouse Qatar as Berlin looks to eliminate the need for Russian gas.


Putin Signs Order on New Ruble Payment Mechanism to Come into Force April 1

Russian President Vladimir Putin signed an order March 31 prohibiting supply of Russian gas to countries that have sanctioned Russia over its invasion of Ukraine, if they refuse to pay for supplies in rubles.


Japan Weighs Government's Involvement in LNG Procurement Amid Ukraine Crisis

Japan said March 31 it will consider ways for the government to enhance its involvement in the country's LNG procurement as part of its emergency response to energy security concerns in the wake of Russia's invasion of Ukraine.


Russia's Novak Says European Gas Prices Could Exceed $4,000 Per Thousand Cubic Meters

Russian deputy prime minister Alexander Novak said March 23 that European gas prices could exceed $4,000/1,000 cubic meters given the current situation in energy markets.


Ukraine Targets Quick Post-War Return to Renewable Gas, Hydrogen Plans with EU

The EU and Ukraine plan to pick up on hydrogen and renewable gas export projects as soon Russia's war on Ukraine is over, an adviser to the Ukrainian government said April 13.

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Impact on Metals & Chemicals

Nickel Producers Confident They Can Fill Gap if Russian Supply is Cut Off

Top nickel-producing nations can rapidly ramp up production and meet global demand if sanctions or an export ban curtail supply from Russia, the world's fourth-largest nickel producer.

Russia, home to nickel giant PJSC MMC Norilsk Nickel, produced 195,000 tonnes of mined nickel in 2021, or 7.2% of global supply, according to data from S&P Global Commodity Insights' Metals and Mining Research team. It produced 121,000 tonnes of primary nickel, or 4.6% of global production. And while nickel has not been the subject of sanctions or a target of Russian President Vladimir Putin's March 10 ban on certain exports, markets fear the loss of so much supply.

With nickel demand high for use in batteries used in electric vehicles and on the grid, nickel prices have skyrocketed since Russia's Feb. 24 invasion of Ukraine. A member of The Wall Street Journal's editorial board articulated market fears in a March 14 commentary headlined "Russia Can Hold Nickel Hostage."

But analysts and nickel producers say the Russian supply can be replaced. Scrap recycling becomes viable at high prices, helping backfill any deficits in the very near term, and nickel-producing heavyweights in the South Pacific have new mines and processing plants set to come online soon.

"Western Australia is the world's fifth-biggest producer of nickel and is well placed to meet the strong global demand for nickel," Western Australian Minister for Mines and Petroleum Minister Bill Johnston said in an email.

Here come the nickel mines

High nickel prices were stimulating exploration and mine expansion even before the Russian war in Ukraine. The London Metal Exchange three-month nickel price is up 54% to $31,803 per tonne since the start of the year, according to S&P Global Market Intelligence data, though it is down from the more than $100,000/t the metal hit amid a short squeeze March 8, which caused LME trading to shut down.

BHP Group Ltd. announced in October 2021 that it produced the first nickel sulfate crystals from its Nickel West sulfate plant in Western Australia. The miner is looking for opportunities to grow production at the plant, Johnston said.

"BHP is ramping up to 20,000 nickel-equivalent tonnes per year to be fed directly into the electric vehicle battery market," Johnston said.

According to BHP, the plant will produce 100,000 tonnes of nickel sulfate per year, enough to make 700,000 electric vehicle batteries each year. The company did not clarify when the plant will be fully operational and has not responded to a request for comment.

Meanwhile, the Philippines, the world's second-largest nickel ore producer next to Indonesia, is expected to open 10 nickel mines this year, according to Mines and Geosciences Bureau Director Wilfredo Moncano. The Philippines now has 32 nickel mines in operation.

Philippine Nickel Industry Association and Global Ferronickel Holdings Inc. President Dante Bravo said the invasion has created more opportunities for junior nickel miners to bring new mines into commercial operation to take advantage of the increasing nickel ore prices, which would lead to more investments in the sector.

Indonesia and the Philippines have resources that can support the global nickel supply chain.

"I do not think that there is any mine that could match the pure nickel production of Russia, but laterite ores are abundant both in the Philippines and Indonesia that can support the ferronickel production, which is a pure nickel substitute, used for stainless steel, nickel concentrates and other nickel products that can be used for battery production," Bravo said.

Changing Coal Flows to Boost Dry Bulk Ton-Miles

Disruption to global coal trade flows following Western sanctions on Russia could boost dry bulk freight rates as ton-miles increase.


Japan's Russian Coal Import Ban to Impact LNG, Fuel Oil Procurements

Japan's abrupt announcement to phase-out and ultimately ban Russian coal imports will have a series of impact across commodities -- especially LNG and fuel oil as alternative supplies from its major sellers Australia and Indonesia grow tight, sources told S&P Global Commodity Insights April 11.


Russian Gold Miners Expected to Benefit From Current Market Despite Sanctions

Gold prices have risen on the back of market uncertainty around the Russian invasion of neighboring Ukraine, increasing 8.7% month over month.


Russian Invasion of Ukraine May Drive EU Back to China as Source for Rare Earths

Russia's war on Ukraine could undermine efforts by the European Union to bolster its rare earth mineral supply and break China's hold on the market.

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Replacing Russian Uranium In Case of Ban Might Cost Over $1 Billion: DOE

Replacing Russian uranium and related nuclear fuel services if they are banned over that country's invasion of Ukraine would require government spending of $1 billion or more, the US Department of Energy's top nuclear energy official said March 17.


U.S. Coal Producers Cannot Ramp Up to Feed Russia's European Customers

The global coal market cannot scale up to supply Russia's European customers, top coal producers said recently, which is reflected in coal prices and may hasten coal-fired generation retirements, especially in light of federal plans that would discourage coal burning.


Consensus Price Forecasts – Russian Invasion of Ukraine Drives Up Metals Prices

S&P Global Commodity Insights discusses consensus price forecasts for precious metals, including platinum group metals, and industrial metals amid broader market trends.


Russian Steel Majors Lean on Cost Advantages, Pandemic Experience to Navigate Sanctions

In the face of stiff sanctions, Russian steel companies are capitalizing on experiences gained during the coronavirus pandemic, urgently stepping up their marketing in Turkey and the Middle East, building ties in atypical markets such as Asia and looking for spare parts from outside Europe.



Russia-Ukraine War-Led Supply Disruptions Propel Food Prices to Record Highs: FAO

Tightening supplies and trade disruptions fueled by the Russia-Ukraine war lifted global food prices to a record high in March, the UN's Food and Agriculture Organization said in report April 8.

The FAO Food Price Index averaged 159.3 points in March, up 34% from year-ago levels to reach the highest level since its inception in 1990, the FAO report showed.

Multiple sub-indexes, such as vegetable oils, cereals, and meat also surged to records.

In another report released recently, the FAO warned that the global demand-supply gap caused by the ongoing Russia-Ukraine war, which started Feb. 24, can further push up international food and feed prices by 8%-22% from already-elevated levels.

Both Russia and Ukraine are major wheat and corn exporters, accounting for 19% of corn and 29% of wheat exports globally, according to the US Department of Agriculture.

"Ukraine continued to be the driving force in grain and vegetable oil prices during March as hopes for a quick resolution faded," S&P Global Commodity Insights said April 7 in its Global Biofuels and Agriculture Outlook report.

Since the Russian invasion began, port closures in Ukraine, plus financial and freight challenges for Russian volumes, have hindered exports, the FAO said, adding, "these factors are likely to remain in effect for the remainder of the 2021/22 season," it added.

Cereal prices jump 37% on year

The cereal price index average in March rose to its highest level at 170.1 points, up 37%. "This reflected surging world wheat and coarse grain prices, largely driven by conflict-related export disruptions in the Black Sea region from Ukraine, and to a lesser extent, the Russian Federation," the report added.

Apart from this, poor crop conditions in the US were also seen fueling the rise in wheat prices. According to the FAO, global wheat prices saw a near 20% month-on-month increase in March.

Platts assessments of FOB prices of Australian, Russian, and Ukrainian wheat by S&P Global have increased 64%, 69%, and 47%, respectively, year on year.

Global prices of coarse grains have risen sharply in the past few weeks because of strong corn prices. "Significantly reduced corn export expectations for Ukraine, a major exporter, on top of elevated energy and input costs, underpinned a 19.1% increase in world corn prices month on month," the report said.

FOB prices of corn from Ukraine, the US, Brazil, and Argentina have increased 29%, 37%, 33%, and 25% year on year, respectively, according to S&P Global.

For coarse grains, the FAO has slashed its estimates for global trade in the marketing year 2021-22 to 226.3 million mt, a sharp 10 million mt cut from the previous month.

The FAO also reduced its global wheat trade estimates for MY 2021-22 by more than 4 million mt to 189.8 million mt in its March report.

Vegetable oil markets spike

The Vegetable Oil Price Index spiked to 248.6 points in March, up 23% on the month, as the ongoing war put sunflower oil supplies at risk at a time when consumers were turning away from palm and soybean oils because of high vegetable oil prices. Ukraine and Russia together account for about 76% of the world's sunflower oil exports.

Trade Restrictions, Panic Buying Key Concerns for Agriculture Markets: IFPRI's Glauber

Potential export restrictions and panic buying could push agriculture prices further higher as the market grapples with growing uncertainty owing to Russia's invasion of Ukraine, Joseph Glauber, senior research fellow at International Food Policy Research Institute said in an interview to S&P Global Commodity Insights.


EU's Corn Deficit Highlighted By Loss of Imports From Ukraine: Tallage

The European Union's structural deficit in corn has been highlighted by Russia's invasion of Ukraine, its main source for imports of the feedgrain, said agricultural consultancy Tallage, which expects the resultant destocking to reduce the region's stocks to their lowest level since 2013.


India's Purchases of Russian Sunflower Oil Pick up in March Amid Ukraine's Absence

Indian vegetable oil buyers are set to receive about 30,000-40,000 mt of Russian-origin sunflower oil in March with shipments from largest supplier Ukraine still stuck at ports due to the war, traders told S&P Global Commodity Insights March 23.


Russia-Ukraine Conflict Will Test Agribusiness Supply Chain Efficiencies And Consumers' Appetite For More Food Inflation

Since the Russian invasion of Ukraine, agricultural commodity prices and other crop inputs such as fertilizers have spiked and remain volatile reflecting fear of supply shortages.


Russian Troops Seize Agricultural Assets in Ukraine, Could Risk Global Food Security

Russian troops in Ukraine are seizing and destroying agricultural machinery, fertilizer, seeds and fuel stocks, according to several farmers in Ukraine, putting in danger the new crops from one of the world's most important suppliers of wheat, corn and sunflower oil.

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Black Sea Conflict May Alter Global Trade Patterns for Grains, Veg Oil

Pressure on global agriculture markets is growing as the Russia-Ukraine conflict enters its third week as prolonged hostilities could force grain and oilseed buyers that rely on the two major Black Sea producers to look elsewhere for their supplies.

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Following Russia's invasion of Ukraine, S&P Global Commodity Insights looks at the impacts on commodity and energy markets in the region and the world at large.


Cyber Threat

U.S. Utilities Prepare for Heightened Cybersecurity Risk from Russia

While the U.S. power grid is well-prepared to withstand potential cyberattacks, key vulnerabilities persist that could catch utilities off-guard if Russia retaliates against the economic sanctions that were imposed after it invaded Ukraine.

The U.S. Department of Homeland Security's Cybersecurity & Infrastructure Security Agency issued a "Shields Up" alert Feb. 12 in response to the growing Russian threat, indicating that "every organization in the United States is at risk from cyber threats that can disrupt essential services and potentially result in impacts to public safety." The alert said organizations should be ready to detect unusual network behavior as well as make sure all software is up to date and that all remote access requests are validated with multifactor authentication.

North American Electric Reliability Corp. said in a Feb. 28 statement that its "suite of Critical Infrastructure Protection Reliability Standards" is ready to address those additional security challenges. Scott Aaronson, senior vice president for security and preparedness at the Edison Electric Institute, the trade group for investor-owned utilities, wrote in an email that "member companies are closely monitoring the situation and are coordinating across the industry and with our government partners."

Insurers Bracing for Cyber Claims from War in Ukraine

The insurance industry is preparing for a potential surge in cyberattack claims if the Russia-Ukraine war continues to escalate.


U.S. Energy Companies on High Alert, Ready to Defend Grid, Pipelines From Russian Cyberthreats

The oil, gas, and power sectors, though not impervious to a cybersecurity breach, are ready to act if Russia attempts to attack their networks and have plans in place to thwart or mitigate disruptions to operations, industry and cybersecurity experts told S&P Global Commodity Insights.


Conflict in Ukraine: A Turning Point for Cybersecurity

If the conflict in Ukraine signals a global realignment of powers, its impact will be no less felt in cybersecurity.


Cyber Threat Brief: How Worried Should We Be About Cyber Attacks On Ukraine?

We see a heightened risk of cyber attacks on Ukraine amid escalating tensions with Russia, which could create knock-on effects for corporations, governments, and other parties in the region and beyond.


Russian Cyberattack Risk May Spur U.S. Cybersecurity Investments

The U.S. is preparing for Russian cyberattacks as the conflict between Russia and Ukraine escalates, a fact that may spur cybersecurity spending in the near term.


As the Russia-Ukraine military conflict rages on, S&P Global Market Intelligence Insights reports on how geopolitical factors and market volatility issues are affecting businesses across all industries at the local, regional, and global levels.



Big Tech cloud providers face mounting pressure to exit Russia

As Big Tech cloud providers weigh shutting down access to their digital infrastructure by Russian entities as part of a global backlash to the war in Ukraine, analysts predict the impact will be felt most by private enterprises in Russia.

Amazon.com Inc. and Microsoft Corp., the world's largest cloud providers, have already stopped accepting new contracts for cloud services in Russia. Their next move is likely to cut services from existing customers, analysts said, though the companies are taking time to weigh the repercussions.

"We believe it's a matter of when and not if AWS and Azure pull the plug on cloud services in Russia," said Wedbush Securities analyst Daniel Ives. "Street pressure is building, and investors want U.S. tech firms to leave Russia quickly."

When contacted by S&P Global Market Intelligence, spokespeople from both Microsoft and Amazon declined to comment on whether they planned to completely disable their products in Russia. In a March 8 statement, Amazon said AWS had "no data center, infrastructure, or offices in Russia, and we have a long-standing policy of not doing business with the Russian government."

The company's biggest AWS customers in Russia are companies headquartered outside of the country, according to a March 4 Amazon blog post.

Impact On Tech From Russia-Ukraine Conflict Muted For Now, With Risk Of A Further Macroeconomic Slowdown

S&P Global Ratings believes the Russia-Ukraine conflict will have a modest impact on the overall technology sector's credit quality for now.


U.S. Companies Assess Financial Impact from Russia-Ukraine Conflict

The growing exodus of multinational companies from Russia includes many in the technology, media, and telecommunications sectors.


Around the Tracks: Parts Shortages Stifle Vehicle Production Amid Cutbacks in Russia

The global semiconductor shortage continued to affect vehicle markers production into early 2022.


How the War in Ukraine Could Impact Data Centers

With the war in Ukraine and related economic sanctions on Russia reverberating globally, long-term impacts will likely be felt by economies and supply chains well beyond Eastern Europe. While not necessarily top of mind in discussions of major global events, data centers are at the core of the world's digital infrastructure and will likely be affected as well.


Actions of Energy Majors

International Rules, Commercial Needs To Dictate Russian Energy Ties: Sinopec

China's state-run oil and gas giant Sinopec will comply with local and international regulations to manage its investments and conduct energy trades with Russia, a company executive said March 28.

Despite the mounting and sweeping financial sanctions against Moscow, Sinopec's investments and business operations in Russia remain relatively stable for now, though the company would rigorously assess business economics and financial risks for any Russian energy trades and projects ahead.

"The operation of the company's business and projects in Russia are generally smooth, and there is no risk to impairment of the assets for the time being [according to relative accounting regulation and rules]," company president Yu Baocai said during a conference call to announce Sinopec's 2021 annual results.

Sinopec acquired a 10% stake in Russia's PAO SIBUR Holding in 2015.

It holds a 40% stake in the joint Amur Gas Chemical Complex (GCC) project with the Russian petrochemical producer Sibur.

The projected has been under construction since August 2020, with the construction cost estimated to be below $10 billion.

Sinopec set an operation management desk in Russia to monitor the construction and associated progress. A source with knowledge about the desk told S&P Global Commodity Insights that the project has been progressing slower than usual.

The decision to buy discounted Russian crude and LNG cargoes will be governed by prices, specifications, freight, tariffs, as well as international policy obligations, the official said, adding that Sinopec will continue to diversify its import sources.

As the world's top refiner by capacity, Sinopec relies on crude imports to meet around 86% of its throughput demand.

Seaborne Russian crudes are among its sources. Sinopec is the leading buyer of Russia's Urals crude and it has purchased at least one cargo for loading in May, S&P Global reported earlier. Sinopec is not only a state-owned company but also listed in Shanghai, Hong Kong and New York.

Refining faces challenge

Sinopec Chairman Ma Yongsheng said the company's refining sector faces a rising challenge with crude prices fluctuating mostly at high levels.

Shell Sees Falling Q1 Output Volumes, $4 bil-$5 Bil Hit from Russia Exit

Shell on April 7 flagged a $4 billion-$5 billion hit from its withdrawal from Russia when it publishes upcoming first-quarter results together with further reductions in its oil and gas production, saying its upstream output had been in a range of 1.9 million-2.1 million b/d of oil equivalent, down from 2.5 million boe/d a year earlier.


Japan's Idemitsu Kosan Suspends New Russian Coal Trade

Japan's Idemitsu Kosan has suspended new Russian coal trades for Japanese end-users' imports amid uncertainty over payment settlements and the possibility of logistics disruptions, a company spokesperson told S&P Global Commodity Insights March 29.


Japan's ENEOS Has No Plans to Sign Russian Crude Import Deals Following Invasion: Chairman

Japan's largest refiner ENEOS does not plan to sign any Russian crude oil import contracts following Russia's invasion of Ukraine, ENEOS Holdings Chairman Tsutomu Sugimori said March 22.


Japan's Idemitsu Kosan Suspends New Russian Crude Oil Trades

Japan's second largest refiner Idemitsu Kosan has decided to suspend new Russian crude oil trades for imports amid uncertainty over payment and logistics disruptions, a company spokesperson told S&P Global Commodity Insights March 23.


Shell to Stop Russian Crude Purchases, Cut All Russian Energy Involvement

Shell on March 8 said it was stopping all spot purchases of Russian crude oil with immediate effect and would end all involvement in Russian hydrocarbons including crude, refined products, gas, and LNG in response to the invasion of Ukraine.



Global Auto Sales Forecasts: Russia-Ukraine Conflict Imperils Recovery

The Russia-Ukraine conflict is intensifying global supply disruptions and has led S&P Global Ratings to revise downward its projections for global light-vehicle sales.

S&P Global Ratings now expects global sales to fall by up to 2% in 2022 compared with last year.

Supply issues could have short-term credit implications for some global auto producers and suppliers.

Autology: Enormous Downside Risk to Automotive as the War in Ukraine Continues

As the war continues to rage on, vehicle production, demand, and the global supply chain supporting this sector are experiencing major disruption. We discuss the revised outlook for vehicle production as well as the key supply constraints that will have broad ramifications beyond Ukraine. Sanctions on Russia, both government led and self-induced, open another door for further complications that could have a lasting impact.


Global Battery Supply Chain Now Facing Impacts From Russia Invasion

As a global industry, batteries are not only dealing with pandemic-related supply chain issues, but now also impacts from Russia's invasion of Ukraine, making US energy independence a "ridiculous concept," a public policy professor said March 9.