In the latest episode of “Talking Trade,” Michael Best Strategies Principal Mike Dankler provides an update on the latest sanctions against Russia and the effect on trade and commodity prices.
“One area where the U.S. and EU and others haven’t really gone the full way is on energy,” he explained. “EU is just so reliant on Russian oil and gas that they can’t go too far yet without hurting themselves.”
Dankler said it’s uncertain how long it will take for certain sanctions on Russia to have a real impact on the war in Ukraine. He noted long-term export controls are expected to impact Russian factories, while banking sanctions recently announced by the United States “make a default almost imminent.”
“How does that impact Russia’s ability to prosecute its war? That’s kind of the main question,” he said. “And the secondary question of, what does Vladimir Putin consider a win?”
He also points to “wide-ranging” impacts on global supply chains, though he noted Russia isn’t as interconnected with western supply chains as a country like China, for example. But because both Ukraine and Russia are major producers of wheat, he warned of potential famines or food supply shortages.
“We haven’t seen that yet but it’s definitely a concern,” he said.