On Saturday at Tekedia Live, we looked at the economic implications of the Russia-Ukraine war. We already know that one giant West African food company is laying people off because it cannot get enough wheat to run the factory. So, expect the prices of bread, biscuits, etc to surge in the next coming weeks.
In London this morning, the trading of nickel has been suspended. Price has gone from $20,000 to $100,000 in the last two weeks; it doubled overnight.
Some of us who studied geography in secondary school and read Goh Cheng Leon’s Physical And Human Geography, we saw that plot on the distribution of special metals. Russia has a big representation for nickel. Nickel is used in making batteries and stainless steel (to reduce corrosion). So, if it becomes scarce, prices of electronics will ramp up. It is fear everywhere.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
- Three-month nickel on the London Metal Exchange briefly jumped to a record high above $100,000 a metric ton, before paring gains.
- “It is a very dangerous market right now because this is a market that is not driven by supply and demand, it is driven by fear,” Saxo Bank’s Ole Hansen said Tuesday.
But the biggest moment will come when US bans Russia’s oil and gas. I expect that to happen this week. According to CNN, President Joe Biden “is expected to today ban Russian oil, natural gas and coal imports to the US, according to three sources familiar with the decision. The US will make the move unilaterally, without its European allies, due to disagreement among European nations about whether to ban Russian energy. EU countries have significantly more exposure to Russian energy than the US”.
The US can do the ban since it does not depend much on Russian oil and gas (about 3%; Europe depends on Russian energy up to 39% for natural gas. So, Europe cannot do this ban anyhow because of the economic risk.
Oil prices jumped to their highs of the session on a report that the U.S. would ban Russian oil imports.
WTI crude oil jumped about 4% to near $124 a barrel.
The U.S. was set to ban Russian oil, liquefied natural gas and coal without European participation as soon as Tuesday, according to the Bloomberg News report.Americans are now paying the most at the pump on record as energy prices surge, contributing to rampant inflation that’s hitting all areas of the economy.
People, if you have a job, be extremely careful. If this war continues till April, expect global recession. High energy prices, high electronics prices, fear of supply chain and massive dislocations could be economically damaging as covid-19 in some economies.
---
Register for Tekedia Mini-MBA (Jun 3 - Sep 2, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.