Chronicle of raw materials

War in Ukraine: a fundamental rupture in the markets

Audio 01:49

The war in Ukraine has dramatically disrupted Russian gas supplies to Europe.

© REUTERS/Gleb Garanich/Files

By: Marie-Pierre Olphand Follow

2 mins

What will the aftermath of the pandemic and war on the commodity markets look like?

The Russian offensive marks the end of a happy globalization according to the authors of the 36th CyclOpe report, the French bible of world markets, released on June 7, 2022.

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There was the world of yesterday and there will be the one after.

A world that will be marked by a fundamental break in global geopolitics, according to the authors of the CyclOpe report.

" 

 ," summarizes Philippe Chalmin, professor at Paris Dauphine University and co-director.

If most of the tensions that are expressed today date back to 2021, the war in Ukraine has added a level of complexity.

It amplified the agricultural crisis, it triggered an oil crisis in addition to a gas crisis, and accentuated a little more the logistical crisis, describe the 65 authors of the book.

On the commodity markets, two days, March 7 and 8, 2022, illustrate the global panic and price volatility that characterize the period: during these 48 hours, the barrel of Brent came close to 140 dollars, wheat exceeded 400 euros per ton, natural gas in Europe has gone beyond 300 euros per MWh, nickel has completely derailed and exceeded 100,000 dollars per ton.

The anguish of supplies in the world of tomorrow

" 

 ," summarizes Yves Jegourel, the other co-director of the CyclOpe report, professor at the National Conservatory of Arts and Crafts, holder of the chair in the economy of raw materials.

On the agricultural level, the most difficult is yet to come.

The next campaign will be done without many Ukrainian exports while the price of fertilizers will be felt until 2024 on world crops.

With the prospect of potential shortages, the trend is towards securing supplies, particularly in the industrial metals sector.

A new geography of world trade

If globalization is not called into question, it raises many questions, point out the authors of the report.

The latter make the observation of a world that is covered with barriers, sanitary, logistical and now political, as in the aftermath of the Second World War.

According to experts, the Russian offensive has deepened the divide between the United States and China, two camps now difficult to reconcile.

The war also strengthened the Moscow-Beijing axis in response to Western sanctions.

A new "sharing" of the world that is already redefining the flow of raw materials.

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