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Russia attacks Ukraine

Markets tumble worldwide

Oil prices cross record high

  • Russia is the world’s second-largest crude oil exporter and the world’s largest supplier of natural gas, which is essential for heating homes, powering airlines, and filling cars with fuel.
  • Oil marketing organisations are likely to revise fuel prices soon as the Brent crude oil price climbs to new highs. Experts in the field anticipate that once the state assembly elections in India get over in early March, petrol and diesel prices will skyrocket.
  • In 2021, India imported 43,400 barrels per day of oil from Russia (about 1% of total imports), while coal imports from Russia totaled 1.8 million tonnes, or 1.3% of total coal imports. India purchases 2.5 million tonnes of LNG per year from Russia’s Gazprom.
  • Russia and Ukraine, dubbed “Europe’s bread basket,” export a quarter of the world’s wheat and half of the world’s sunflower products, such as seeds and oil.
  • Last year, more than 40% of Ukraine’s wheat and corn exports went to the Middle East or Africa, and supply delays could influence availability in these regions. The ongoing war will wreak havoc on food output and perhaps quadruple global wheat prices.
  • Russia is also one of the world’s leading fertiliser exporters. Because they were in short supply last year, their price has already risen, and farmers may have to spend even more to obtain them and grow their crops.
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Import costs may rise

India relies on the global market for about 85% of its requirements. Rise in consumption in India may jack up import costs.

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Opportunities in biofuel

The government may focus on converting more sugar and grains into biofuel to reduce its dependence on overseas supplies and cut bulging sugar stockpiles.

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Effects on Forex

There will be fluctuations in Dollar value, which will see exporters gain more value and importers having to pay more.