February 25, 2022

War in Ukraine Jolts Energy and Equities

GeopoliticsCommodities

What Happened

Russia invaded Ukraine on February 24, launching attacks across the country. Brent crude shot above $100 for the first time since 2014, European equities slid, and safe-haven flows pushed Treasury yields lower intraday.

What It Means

Energy supply fears resurfaced, especially for Europe’s gas and oil needs. Sanctions risk loomed over Russian banks and commodities, raising the prospect of supply disruptions and higher inflation just as central banks prepared to tighten policy.

What I Think

Geopolitics reasserted itself as a market driver. I expect sustained energy volatility and tighter financial conditions, with Europe bearing the brunt. Central banks now face an even tougher mix of inflation and growth risks.

Market Terms

Oil above $100 – Crude spiking on invasion-driven supply fears.
Safe-haven rally – Treasuries bid as equities sell off.
Sanctions premium – Pricing risk of restricted Russian commodities and banks.
Energy-driven inflation – Higher fuel costs complicating central bank tightening.