Commodity markets: shocks and spillovers

Fernando Avalos and Wenqian Huang

BIS Quarterly Review, 2022

Abstract: Dislocations from the Russia-Ukraine war have buffeted commodity markets from both the financial and real sides. We argue that a substitution of Russian oil exports would be difficult, implying that restrictions on these exports may result in large and persistent price increases for oil-related products. Surging oil prices may be partly moderated by an increased use of biofuels, but this in turn could push up the prices of the staple crops that are biofuel feedstocks. In addition, persistently high prices for natural gas, key for electricity generation, could extend the recent electricity price hikes for final users – a strong headwind for all economic activity, especially industrial production.

JEL-codes: G10 Q02 Q43 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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