As Russia continues to invade Ukraine for a month, global energy and food prices such as crude oil, natural gas, and wheat have soared, and concerns over the global supply chain have worsened.
Eventually, fears of global stagflation such as the “oil shock” in the 1970s are increasingly weighing on the global economy.
Concerns are growing that consumer prices in each country, which have already risen to the highest level in decades due to soaring energy and food prices due to the war, will soar further and the global economy will fall into a recession.
International oil prices jumped more than 40 percent from the beginning of the year. Russia accounts for about 7% of the world’s oil and refinery exports.
International oil prices, which stood at around $90 a barrel before Russia invaded Ukraine on April 24, exceeded the $130 per barrel mark in less than two weeks.
However, it fell below $100 a barrel last week due to expectations for negotiations between Russia and Ukraine and concerns over slowing demand due to the spread of COVID-19 in China.
Since then, oil prices have been on the rise again this week on the news that the International Energy Agency (IEA) and the European Union (EU) are also considering joining Russia’s energy sanctions.
Analysts such as Goldman Sachs and Barclays predicted that international oil prices could rise to $200 a barrel.
Energy information company Rystad Energy also mentioned the possibility of reaching $240 this summer.
Natural gas is also in a serious situation. Russia is the world’s largest natural gas exporter as of 2020, especially the EU, which relies on Russia for about 40% of its natural gas.
Dutch TTF natural gas futures, which represent the price of natural gas in the European market, soared to 345 euros (MWH), the highest price ever, earlier this month.
Since then, the upward trend has calmed down somewhat, but as of that day, it has maintained a surge of about 40% compared to the beginning of the year to 98 euros.
The price index of liquefied natural gas (LNG) in Northeast Asia also rose 12 percent from the beginning of the year.
