February 23, 2024


Russia has restricted exports of natural gas to Europe and announced it will temporarily slash oil output this month in response to Western sanctions. Next, it could weaponize exports of important metals such as aluminum and palladium, researchers at Citigroup have warned.

Prices of these commodities could spike as a result, the bank said in a note to clients dated March 6.

“Any restrictions on exports could have major implications for markets in the short run,” Citi’s analysts wrote.

Such curbs would disrupt operations for manufacturers around the world. They could also fan already-high inflation.

About 15% of traded aluminum comes from Russia, according to Citi. The widely-used metal can be found in airplanes and products ranging from household appliances to foil and kitchen utensils.

The United States has announced a 200% tariff on imports of the metal from Russia. It takes effect Friday.

Russia’s output of palladium, which is used in devices that limit emissions from cars, is said to account for about a quarter of global supply.

Moscow has shown a readiness to use Russia’s vast natural resources to hit back at the West, which has enacted unprecedented sanctions in response to President Vladimir Putin’s invasion of Ukraine a year ago.

For example, last year Russia made deep cuts to its natural gas exports to Europe, its top customer. That forced governments in the region to ramp up efforts to find new suppliers.

Russia has also been accused of weaponizing global food supplies by blockading Ukraine’s Black Sea ports in the first few months of the war and targeting agricultural infrastructure, disrupting the supply of grain to world markets.

Russia’s role in the global nuclear power industry is also under the microscope. The country is a key exporter of nuclear fuel and its nuclear sector has so far mostly escaped Western sanctions.


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