Russian Invasion of Ukraine: Impacts on Global Supply Chains


Following the Russian invasion of Ukraine, countries around the world responded with sanctions, blacklists, and boycotts. In this blog series, we will focus on providing updates on the impacts to global supply chains.

1. Impacts of the Russian Invasion of Ukraine on Global Supply Chains

War in Europe. In this blog, we focus on the pressure that the Ukraine-Russia crisis will exert on already fragile supply chains and financial markets emerging from post-COVID aftereffects. Initial reactions to the Russian invasion underscore the interconnection of global economies. Impacts include:

Sanctions: Economic sanctions on Russia targeting 80% of all banking assets will have a significant impact on global supply chains. According to the WSJ:

  • The US blacklisted Russia’s first- and second-largest financial institutions, Sberbank and VTB, and added numerous other financial institutions to sanctions lists. Two days previously, US-based assets of state-owned banks Vneshekonombank and Promsvyazbank, along with their subsidiaries were frozen.
  • The Biden administration has barred US firms and individuals from dealing in Russian sovereign debt. This cuts off a key source of funding for Kremlin objectives.
  • European Union sanctions will cut 70% of Russia’s banking system off from international financial markets.
  • In the United Kingdom, the government plans sanctions on more than 100 Russian entities. It will pass legislation to bar the Russian government and major state-linked companies from issuing debt in the UK.
  • Additionally, the US, along with France, Germany, Italy, the UK, and Canada, announced that they would expel certain Russian banks from SWIFT, the high-security network that connects thousands of financial institutions around the world. (Source: CNN)

Stock markets: The value of the region, as along with the urgency of the unfolding crisis, is reflected in the stock market’s reaction to the February 24 invasion of Ukraine. Wall Street plunged that day, with the Dow Jones Industrial Average falling by more than 800 points.

Oil prices: Moreover, with oil production by the OPEC nations lagging well behind global demand, both Brent and US oil topped $100 for the first time since 2014. As the crisis continues, this could get much higher. (Source: CNBC) The price of aluminum has risen by more than 20% this year so far, and palladium is up 26.7%. Similarly, wheat futures traded in Chicago jumped 12% to their highest level since 2012. (Source: WSJ)

So, what are implications and further possible impacts for supply chains? Here are some facts on the economies and exports of the two countries.

2. Economies and Critical Exports: Key Indicators

In recent decades, key sectors of the global economy have increasingly relied on both Russia and Ukraine to support global supply chain networks.


The country is a large exporter of raw materials/commodities, agriculture goods, and chemicals used by manufacturing companies that produce semi-finished or finished goods. Although the size of the Russian economy at $1.7 trillion is dwarfed by the US and China, the economy may be more influential than it appears. (Source: PolitiFact)


Some key numbers to consider:

  • Natural Gas: Russia is the world’s second-largest producer of natural gas. The conflict demonstrates how interconnected the economies of Russia and Europe have become, and why it may be able to leverage its influence. (Source: Russia also accounted for 40% of the EU’s natural gas supplies in 2021. (Source WSJ)
  • Oil: As an OPEC member and one of the world's top three oil producers, oil is by far the country’s biggest export. In 2020, Russia produced approximately 10.7 million barrels of oil daily, down from 11.7 million barrels the previous year. (Source: Statista)
  • Aluminum: Although China produces more than 50% of the world’s aluminum, Russia’s second place (6%) generates roughly $4.6 billion in aluminum exports annually. (Source: EU Raw Material Information System; Technik+Einkauf)

  • Palladium: This precious metal is one of several that could be key for fuel cells in various modes of transportation. Palladium is also widely used in catalytic reactions in industry. These include hydrogenation of unsaturated hydrocarbon. Accounting for roughly 40% of the market, Russia is the world’s top producer of palladium. Here, too, prices have climbed. (Source:,
  • Platinum: Another highly desired precious metal, platinum, has a wide range of uses, including catalytic converters, electrical contacts, pacemakers, medication, jewelry, and magnets. Russia is the world’s second largest producer. (Source:
  • Titanium:This metal is as strong as steel but much less dense. Because it can withstand extreme temperatures, titanium is used in aircraft, spacecraft, and missiles. (Source: Russia holds the third spot for the world’s supply. (Source: Seeking Alpha)
  • Nickel: Russia is globally among the largest exporters of primary and refined nickel. High grade nickel is an essential component in electric vehicle batteries. (Source: EU Raw Material Information System; Technik+Einkauf)


According to the CIA World Factbook, Ukraine produced 25% of all agricultural output in the former Soviet Union. Although Ukraine is much smaller than Russia geographically and economically, its grain production and export have earned Ukraine the nickname "breadbasket of Europe.


  • Grains: Ukraine remains a major agricultural exporter of substantial amounts of grain, vegetables, sugar beets, sunflower seeds, milk, and meat. According to Credit Agricole, Ukraine is the world's fifth largest global exporter of grains.
  • Other Agriculture: As it relates to agriculture and agricultural production, Ukraine is first in Europe in terms of arable land area, holds global first place in exports of sunflowers and sunflower oil, third-largest area of black soil (25% of world’s volume), and third-largest producer of potatoes in the world (Sources: CIA Factbook, OEC, World Bank, NationMaster)
  • Uranium: Ukraine is first in Europe for proven recoverable reserves of uranium ores. Uranium is used to power commercial nuclear reactors that produce electricity and to produce isotopes used for medical, industrial, and defense purposes. (Source: Statista)
  • Neon Gas: Neon is used in lithography, a process step for chip production. Almost all neon gas (90%) used in US manufacture of semiconductors comes from Ukraine. (Source: Techcet)

3. riskmethods Monitoring of the Ukraine-Russia Crisis

Global companies and allied governments are pushing for further sanctions and divestment focused on Russia. Based on these numbers and announcements every day, it is clear why corporate procurement and supply chain professionals need to stay updated and informed.

Many companies with business partners and supply chains in Ukraine and Russia have not fully determined what the impacts to their operations will be. As a provider of supply chain risk management, we understand how urgently procurement and supply chain departments need fast, accurate, and real-time updates.

In our next blog, we will talk about managing and mitigating supply chain risk in the days and weeks ahead.

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