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Join S&P Global for a comprehensive analysis of varying Russia/Ukraine conflict scenarios during a period of economic uncertainty. Paul Gruenwald, Global Chief Economist, S&P Global Ratings will outline key macroeconomic observations and the possible paths the conflict could take.

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Russia-Ukraine War: One Year On

Russia is continuing its bombardment of Ukraine, with the conflict now nearly a year on, to wear down the Ukrainian population's support for the war and initiate ceasefire negotiations that would freeze the 1,000-km line of contact.

Russia’s Invasion of Ukraine (Feb. 8, 2023)

Russia-Ukraine Military Conflict: Key Takeaways From S&P Global Ratings

The Russia-Ukraine military conflict could have profound effects on macroeconomic prospects and credit conditions around the world. Leading up to, and during, the conflict, Western countries announced stringent sanctions on Russian entities and individuals.

This raises the risk of restricted trade and capital flows and could weigh on overall confidence and business conditions. In the longer term, the disagreements between Russia and NATO over security concerns will likely persist. The rising geopolitical risk can lead to broader ramifications.

As we end a year in which COVID, a war in Europe and an associated energy crisis, and high inflation roiled markets and slowed the global economy, early signs of easing of some of these pressures provide hope that credit conditions could stabilize in the second half of 2023.

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Capital Markets

Russia-Ukraine War Splinters Europe's Banking Industry

The war in Ukraine has prompted a rupture between the Russian and European banking systems, heightening risks for lenders on both sides of the divide.

Outstanding Claims to Russia of Select European Economies ($M)

U.S. Banks Face Deposit Outflows; Insurers Strive To Gauge Ukraine War Cost

Regulators' increased focus on Community Reinvestment Act compliance has trickled down to merger review and could explain why bank deals are facing closing delays, industry experts said. After three consecutive quarters of runoff, the industry is wrestling with additional declines in 2023 and funding costs that are likely to keep going up even after the Fed pauses interest rate hikes.

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Insurers Unable To Tally Up True Cost Of Ukraine War

The insurance industry is struggling to gauge the cost of Russia's war with Ukraine a year after the conflict began. Exposures far removed from the war itself have been unearthed, while insurers are unable to count the cost of claims across their political risk, marine and aviation business lines. Those covered by the political violence market, such as physical damage to buildings, are also proving difficult to quantify.

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The Russian invasion of Ukraine has not only initiated a global humanitarian crisis, it’s given rise to greater risk exposures in capital flows, trade and commodity markets worldwide. Our experts are sensitive to the effect of the conflict on global economies as well as its impact on our community in deep and varied ways.


Metals & Mining

Metals And The Invasion: Russian Potash Exports Rebound, Expansion At Risk

Russia's fertilizer exports have rebounded from the fallout of the country's February 2022 invasion of Ukraine, calming the panic over potential supply deficits and raising expectations that Russia will continue exporting potash at close to pre-war levels.

However, the country's expansion plans have been disrupted and customers are looking to other potash producers to diversify their supply chains.

Russia and key ally Belarus have typically accounted for about a third of the potash market in recent years. Canada, another top producer, also supplies about a third of the global market.

In the year since the invasion of Ukraine, Russia has continued to supply the market at roughly 85%-90% of its usual capacity, analysts told S&P Global Commodity Insights. There has been some self-sanctioning, especially by European and U.S. buyers, but otherwise top potash consumers such as Brazil have largely continued to buy Russian product.

The invasion's most lasting impact for the potash market will be on trade flows, according to analysts and industry executives. Canada will likely fill some gaps as buyers avoid Russian product, especially in the EU and the U.S.

"What we're talking about is not a change in supply-demand dynamics," said Ben Isaacson, a Scotiabank fertilizer analyst. "We're actually talking about change in trade flows. It's just musical chairs."

YOY Change in 2022 Imports of Russian Potash By Top Markets (%)

Metals And The Invasion: Russian Metals Face Shaky 2023 As China's Demand Cools

China stepped up as a willing trade partner to Russia when some major world economies turned away from the latter's products after the invasion of Ukraine, but Russia's ability to continue to move metals out of its borders will heavily depend on economic conditions in China through 2023.

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Metals And The Invasion: Nornickel Loses Partners Amid War, Seeks New Suppliers

The world's largest producer of palladium and high-grade nickel will spend 2023 building new relationships after it lost access to capital and key logistics chains when Russia invaded Ukraine.

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Metals And The Invasion: Rusal Outruns Sanctions, Plans Expansion

Russian aluminum giant United Co. Rusal IPJSC is looking ahead to expanding operations and selling its low-carbon product into China after booking an estimated 10.6% increase in net income in 2022, according to S&P Global Market Intelligence data.

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Metals And The Invasion: Traders Profit By Navigating Uncertainty

The conflict between Russia and Ukraine disrupted markets, but the chaos proved a boon for some traders adept at moving commodities across borders.

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Shipping & Sanctions

Banks, Funds On Alert As Europe's Enforcement Of Russia Sanctions Ramps Up

More aggressive policing of sanctions against Russia is on the cards as EU and U.K. regulators move to strengthen their enforcement powers, putting financial institutions on alert.

Sanctions-Related Regulatory Fines to Financial Institutions Globally ($B)

US Increases Pressure On Russia With 200% Aluminum Tariff

The US will apply a 200% ad valorem tariff on imports of aluminum and derivative aluminum articles from Russia beginning on March 10 as it continues to increase pressure on Russia's economy in response to its continued invasion of Ukraine, the White House said Feb. 24.

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Asia HSFO Market Likely To Garner Strength As Traders Shun Sanctioned Russian Oil

The Asian high sulfur fuel oil market is likely to strengthen, and quite significantly so, from prevailing levels as oil majors and trading giants begin to increasingly eschew Russian-origin oil, traders said.

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In response to Russia’s invasion of Ukraine, S&P Global Ratings continues to assess the effect on economies, markets, and credit.


Oil & Gas

One Year Of Ukraine War Prompts Sweeping Shifts In Asian Oil Flows

From OPEC's market share in India's imports falling to a decade low to China's appetite for Russian crude posting double-digit growth, one year of conflict between Russia and Ukraine has dramatically altered Asia's oil flow map.

As Moscow witnessed sanctions and restrictions, plentiful availability of discounted Russian crudes whetted the appetite of import-dependent Asia, which saw it as an opportunity to bring in as many cargoes as possible to cushion the impact of sky-high global energy prices.

The trend is expected to continue in 2023. The first sign of that was visible in January numbers. According to data from S&P Global Commodities at Sea, Russian seaborne crude exports hit an eight-month high in January, with exports to China and India hitting record highs of 1.12 million b/d and 1.3 million b/d, respectively.

And in 2023, the overall volume of oil shipments from Russia to Asia is expected to rise since more Russian oil products are expected to flow, in addition to the robust volumes of crude, as the EU ban on Russian products came into effect on Feb. 5.

Share of Russian Crude Oil in India’s Refinery Feedstock Import Basket Rises Sharply

US Crude Exports Continue To See Strong Volumes In Wake Of Russia-Ukraine War

A year removed from Russia's invasion of Ukraine, US crude exports continue to see strong volumes, while new trends have begun to emerge in flows as the global oil landscape has shifted.

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Europe Adapts, Not Without Difficulty, To Life Without Russian Gas

On March 8 last year — two weeks after Moscow launched its invasion of Ukraine — the European Commission outlined plans to significantly reduce the EU's dependence on Russian gas.

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Is Russia's Weaponization Of Energy Failing?

One year on from Russia's invasion of Ukraine, the European gas market is unrecognizable compared with how it looked before Feb. 24, 2022. But fears that Russia's "weaponization" of energy — as it is regularly described by the west — would lead to shortages, especially of gas, have so far failed to materialize.

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Black Sea Agriculture Trade Tilts In Russia's Favor After One Year Of War In Ukraine

Russia's share of trade in the international agriculture markets has risen one year after it invaded Ukraine, with the country's wheat and sunflower oil exports overshadowing slowing Ukrainian volumes, an analysis of trade data by S&P Global Commodity Insights showed.

Russia’s Wheat Exports Seen Rising, Ukraine’s Down

Trends In Grains Market During Russian-Ukrainian War

The Russia-Ukraine war has had a significant impact on European countries. From the perspective of migration movements, Poland has received about 1.5 million refugees from Ukraine. Heavily dependent on Russian coal, gas, and oil, Europe is facing a major energy crisis. Laboriously rebuilt supply chains after the COVID-19 pandemic have been broken again and must be reorganized. The hostilities in Ukraine have also destabilized the global grain market.

The agriculture market is a specific one as the supply in the market for agricultural products is less flexible than in the case of industrial goods. Manufacturers are unable to respond to large changes in demand or prices, since the flexibility depends mainly on natural factors such as climate, soil, and topography of the region.

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