With

Olivia Frieser, Global Head of Markets 360

David Martin, Head of Commodities Desk Strategy

David Wilson, Metals Strategist

BNP Paribas | Global Markets (Recorded 3 February 2022)     

In the hypothetical event of a full-blown conflict between Russia and Ukraine, we would expect the main impact on commodity markets to be higher European gas prices. 

There could be further direct effects on global gas, oil and metals markets, proportionate to the impact of a loss of Russian production.

In a worst-case scenario, we estimate European gas prices would be pushed to fresh highs of EUR200/MWH and remain above EUR160/MWH for much of 2022. 

Oil markets would likely see an increase of USD5-10/bbl in a conflict scenario, depending on the scale and duration of any sanctions applied to Russian exports. 

Russian aluminium and nickel exports to North America and Europe are crucial to market balance and liquidity. Consequently, we expect nickel and aluminium would be the worst-affected base metal markets in the event of sanctions on Russia. 

In a worst-case scenario, we see a short-term price impact of 10% and 16% on aluminium and nickel prices, respectively, from current levels. 

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For more information, please refer to https://markets360.bnpparibas.com  

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