All the economic sanctions imposed on Russia can have far-reaching effects on the whole world. The main reason for this is the Russian raw material used in the aviation, marine and car industries. Apart from this, the supply of wheat across the world will be affected. The impact on the banking system is also starting to show. There are 120 billion dollars stuck in Russia from various banks of the world. The Russian attack on Ukraine has added to the uncertainty in the global economy.
America’s aviation industry
The economic sanctions will affect the imports of many US companies, especially titanium, a key ingredient in aircraft manufacturing. After invading Ukraine, the US and Europe imposed financial sanctions on Russian banks, Russian nobles and other entities. However, no sanctions have yet been imposed on Russian commodity exporter VSMPO-AVISMA, which supplies titanium to aircraft maker Boeing and Airbus. Airbus has said it relies on Russia for half of its titanium demand. Some Russian banks have also been isolated from the global financial system SWIFT. The move could also affect the supply of several Russian exports, including titanium.
reliance on titanium
Titanium sponges are made from the precious metal titanium mineral particles and are used in many industries. China is currently the largest producer of titanium sponge in the world. According to the US Geological Survey, last year’s global titanium production stood at 210,000 tonnes, of which China accounted for 57 per cent. Japan was second with 17 percent and Russia was third with 13 percent.
Last year Kazakhstan produced 16,000 tonnes and Ukraine 3,700 tonnes. Obviously, Russia’s titanium reserves are not very large, but it occupies an important position in this area. In 2021, Ukraine was the major source of titanium mineral, which was imported to Russia, says USGS. The USGS estimates that Ukraine produced 525,000 tonnes of titanium mineral concentrate last year.
major importing countries
China is the world’s biggest buyer of titanium, says import and export consultancy CRU, having bought more than 16,000 tonnes of titanium sponge last year. The US imported 19,000 tonnes of such sponges in 2020, but a year later this import dropped to 16,000 tonnes. Japan, China and the United States export the largest amount of titanium sponge. According to CRU, the recent recovery in the construction and aviation industries after the corona pandemic has pushed up the price of titanium sponge. This metal is mainly used in the aviation industry.
$120 billion stranded by banks
According to data from the Bank of International Settlement, $120 billion of foreign banks are trapped in Russia. The largest amount of $ 25 billion is from the banks of Italy and France. At number two are American banks, which have $14.7 billion in Russia. Citibank of America has 10 billion dollars in it in Russia. There is a foreign investment of $79 billion in Russian debt securities. Meanwhile, British oil and gas company BP has announced to sell its stake in Russian oil company Rosneft. Rosneft holds about 50 percent of BP’s oil and gas reserves.
food crisis
In the era of war, the crisis of food shortage is going to come to the fore soon. This crisis has knocked in Yemen, a country devastated by the civil war of the Middle East. People in civil war-ravaged Yemen are now desperate to buy flour. The World Food Program (WFP) said last week that the Ukraine crisis could lead to further increases in fuel and food prices. In many parts of Yemen, food prices have more than doubled in the past year. Russia and Ukraine produce about 29 percent of the world’s wheat. Now a war has broken out between the two countries, increasing barriers to global wheat exports and causing the price of wheat to rise sharply. Conflict and inflation in Yemen have pushed millions of people into famine.