Ukraine’s economy is currently facing a challenging security situation resulting in adverse market conditions that will disrupt trade and investment and the country’s growth. Given this, few industries are likely to escape the impacts of the crisis. But given Ukraine’s role as a major exporter of agricultural products, metals, machinery and auto parts, EDC expects these sectors to be heavily impacted.
As the crisis continues, energy costs are soaring, as well as concerns about the oil and gas industry. Russia produces 10% of the world’s oil supplies. On March 1, Brent crude jumped above the US$100 mark. In addition, Russia supplies 40% of European natural gas, much of which goes through Ukraine, which is also a trans-shipment point for oil, with approximately 250,000 b/d of crude destined for Europe.
Russia is also the world’s largest exporter of grains and fertilizers, a key nickel producer, the third-largest exporter of coal and steel, and fifth-largest wood exporter. Depending on the scope of the conflict, there’s a risk of disruptions at neighbouring ports on the Black Sea, including Romania, Bulgaria, Georgia and Turkey.
