Commodities traders brace for a war in Ukraine

“IF RUSSIAN TANKSRBC cross the border, markets will freak out.” That is the considered judgment of Helima Croft, head of commodity strategy at Capital Markets, an investment bank, and a former analyst at America’s Central Intelligence Agency. Were Russia to invade Ukraine, the biggest impact would first be felt on European gas markets. But Ms Croft is not alone in thinking that the shock waves would spread far more widely.The potential for disruption stems from Russia’s huge importance for commodity markets (see chart 1). It is the world’s biggest exporter of natural gas, and the second-largest exporter of oil. It supplies nearly a tenth of the world’s aluminium and copper, and produces a range of other metals, including 43% of the world’s palladium, a component of catalytic converters. It is also the largest exporter of wheat.