Geography may allow Australia to avoid the direct human costs of the Ukraine conflict but not its fallout. Commodity market disruptions, supply chain breakdowns, sanctions and geopolitical realignments will affect Australians.
Russia is the world’s second largest gas producer (17% of global output) and the third largest oil producer (12%). It is a key supplier of aluminium, copper, nickel, platinum, palladium and titanium. Russia and Ukraine supply up to 80 to 90% of neon gas used in lasers to make semiconductors.
They produce large quantities of cereals, including almost 25% of the world’s wheat, and oilseeds for human and livestock consumption.
Loss of all or part of this supply will affect production and prices. Oil, gas, wheat, palladium and nickel prices have gone parabolic. Without rapid de-escalation, sustained high commodity prices may reduce global growth by 1% and add up to 3% to inflation.
Australian energy producers and…
