According to a report by the Bank for International Settlements (BIS), Russia accounts for ten percent of all global oil exports. A restriction on exports as a result of the war would be accompanied by significant and prolonged price increases. There may also be an impact in other areas, such as food prices.
Because of the war in Ukraine, many western countries want to avoid Russian crude oil in the future. Finding alternatives is a “difficult task”, according to the staff of the Bank for International Settlements (BIS). They published their quarterly report on Monday. For example, it states that it is unlikely that other producers would have sufficient capacity to replace the failure of Russian oil.
Too little investment in new oil wells
In addition, investments in the discovery and exploitation of new oil wells have declined since the corona pandemic. While the BIS considers it conceivable that the increased use of biofuels could lower the price of crude oil, it could raise the prices of staple foods. These, in turn, are needed to produce biofuels.
Price increases from, for example, maize to soybeans are conceivable. Disruptions in global energy markets could make many agricultural products more expensive, the BIS warned.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
