Global Impacts of the Russian Invasion of Ukraine

The March light vehicle production update from S&P Global Mobility (formerly the automotive team at S&P Global) is likely to downgrade its 2022 forecast by 2.6mn units (i.e. to 81.6 million). The downgrade decomposition will broadly comprise just under 1mn units from lost demand in Russia and Ukraine; and the remainder split between 1) worsening semiconductor supply issues, and 2) loss of Ukraine-sourced wiring harnesses and other components respectively. In addition, the complete loss of Russian palladium is a tail risk with the potential to become the industry's biggest supply constraint.

Learn why repercussions from the Ukraine invasion places 2.6mn vehicles at risk in 2022.

Before the Ukraine invasion, Russian oil exports were about 7.5 MMb/d—roughly 4-5 MMb/d of crude oil and 2-3 MMb/d of products. Our Commodities at Sea data indicates that loadings and unloadings of Russian crude oil and products are down from pre-invasion levels. Severe price discounts for Russia's Urals crude oil, $29/bbl below Dated Brent compared with typical discounts of $2-4/bbl, indicate great difficulty selling Russian oil since the invasion. At the same time, mainland China has just imposed its most severe regional restrictions on movements since the 2020 COVID-19 outbreak—contributing to stunning volatility and a sharp price drop.  Most of Russia's preinvasion oil sales were to NATO members. That will change—and it began on 8 March when the United States banned the import of Russian oil. In Europe, the transition away from Russia will take longer.

Learn how the Ukraine-Russia conflict will cause the partitioning of the world oil market.