Russia is a key supplier of oil and some other strategic commodities. Reportedly, rising geopolitical tensions in Eastern Europe would be beneficial to these commodities.
Russian President Vladimir Putin announced that he had recognised the independence of two breakaway regions in eastern Ukraine and ordered the deployment of troops to those regions. Consequently, the US and the UK moved ahead with sanctions.
On Tuesday, US President Joe Biden announced that the first wave of sanctions would target Russian banks and sovereign debt. Biden threatened tougher steps if Russia continued its aggression towards Ukraine.
Crude oil prices could surge from $100 a barrel to $120 due to the cuts in oil and gas supplies and the shutdown of the Nord Stream 2 pipeline.
Other strategic metals that will benefit from this situation are palladium, copper and cobalt.
Russia is the world's second-largest producer of platinum, first in palladium production and third in wheat production.
Wheat prices have risen about 4.85% since early 2022.
Russia also produces 3.5% of the world's copper. With the growing demand for electric cars, copper is one of the main components there.
Moreover, 4% of the world's cobalt, used in these batteries for electric cars, is also produced in Russia.
Therefore, Russia is a very strategic country when it comes to commodity production, commodity exports and the direction of the world economy.
If geopolitical tensions heighten and sanctions are imposed on Russia, the mentioned above commodities will rise.
