Going Up: Oil, Wheat, and Bitcoin Spike Amid Russian Invasion

Oil Prices at Seven-Year Highs

Russia’s invasion of Ukraine comes amid an already tight global oil market. Demand that cratered during the pandemic has rebounded, and supply has not kept pace. The ensuing rise in prices has been accelerated by the armed conflict. Any disruption in Russian oil delivery would have a big impact, as the country produces around 10% of the world’s supply.

As Russia invaded last week, oil prices around the world topped $100 a barrel. This week Canada became the first nation to ban Russian oil imports. Analysts say some lenders are shying away from the financing of commodities trades, which could disrupt oil deliveries and send prices even higher.

Wheat Prices Highest Since 2008

Grains like wheat and corn are massively important raw materials for food producers, and they’re also part of the conflict’s economic story. Russia is the world’s largest exporter of wheat, and Ukraine is within the top four.

As Russia’s invasion advanced, wheat futures hit 984 cents a bushel — the highest price in a decade. The price spike was so extreme on Tuesday that wheat futures traded at “limit up,” which refers to the largest price increases regulators allow during one trading day. Corn futures also hit their highest level since May.

Bitcoin and Crypto Pop

As the US and its allies enacted sanctions against Russia and its central bank, cryptocurrency prices began to rise. CoinDesk shows Bitcoin (BTC) jumped 13% over a 24-hour period earlier this week, while other digital coins saw a similar spike. Ethererum (ETH) rose 10% on Tuesday, while Dogecoin (DOGE) jumped 6%.

Analysts say there’s a distinct possibility Russian interests are utilizing digital currency as a way to get around economic sanctions. Bitcoin and other assets traded on the blockchain can’t be traced like dollars and euros. Investors who saw the Russian ruble tanking may have also shifted assets into digital currency. The rising prices attributed to Russia’s invasion clearly involve both traditional market dynamics, and more modern trends.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.
Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22030201