-Neon, titanium, and really big planes --
They all have something to do with the conflict in Ukraine.
And that's going to affect us all.
[explosion]
The biggest land war in Europe since World War II
is upsetting everything from lives to ways of life.
The ripple effects of sanctions and a shuttered economy
extend far beyond these lands.
Start with energy.
-Russia is an enormous powerhouse
in the oil and gas market.
On the oil side, it is the world's third largest producer.
-It doesn't matter that the U.S. imports
a very small percentage of Russian oil,
a sort of lower-grade oil used in refineries.
The oil marketplace is global, and as prices spike --
and they have, with oil past $100 a barrel --
everyone pays more.
Supply is tight and demand strong,
and that was before Russia invaded Ukraine.
-My advice would be, unfortunately,
brace for higher fuel prices.
-Russia exports about 5 million barrels a day.
It's still flowing -- for now.
But if that stops, the world only has
about 3 million barrels a day of reserve --
not enough to make up the gap.
-Oil is a longer-term business.
You just can't go into a basement somewhere,
turn a nozzle or a tap, like in a sink,
and out comes the oil.
-Beyond oil, natural gas from Russia heats much of Europe.
But it's not just oil and gas coming out of the ground
that's valuable.
It's the ground itself.
-The black soils, or also known as the black earth.
-Just look at this rainfall map
and the areas outlined in red and green,
almost perfect conditions
for being a breadbasket to the world.
Nearly a third of global wheat comes from here.
Grain exports help feed parts of Africa, Turkey,
Gulf states, and central Asia.
-Imported wheat from the Eurasian region
is incredibly important for making things like bread
but also pasta, couscous.
-Ukraine and Russia also export
most of the world's supply of sunflower oil,
used in snacks and other food production.
Winter wheat will soon have to be harvested here,
if that's even possible with war.
A lack of grain or high prices
could upset politics in other nations,
as happened in Egypt in 2011 and the Arab Spring.
-Grain subsidies are contributing
to a lot of the legitimacy of the government.
So if the government is unable to subsidize grain,
that can have repercussions
for popular support of these countries' regimes.
-But it's not just agricultural products.
It's materials mined out of the earth or made in mills,
all part of an intricate global supply chain.
Much of the world's neon comes from here,
the gas a by-product of steelmaking,
a gas then used in lasers that create semiconductors.
Already the world is facing a chip shortage,
affecting the auto industry and tech firms.
-So don't drop your iPhone.
Get the protective screen right away.
-Russia is a big producer of palladium,
platinum, copper, cobalt --
more raw materials going into chips and cars.
It also produces lots of titanium.
Boeing's largest supplier is here,
the high-performance material used to assemble planes,
make landing gear and engine parts.
Sanctions mean a scramble for metals and minerals
outside Russia.
-Unfortunately, it's not just one, two, or three commodities,
where we can get alternative sources from everywhere.
-The days of Russia as a supplier and customer
are threatened.
-They're really trying to, the way I understand it,
isolate Russia,
really put them in an economic position
that takes them back decades,
where they're unable to trade with partners.
-Russia is being cut off from the world.
Big container lines are no longer calling at its ports.
Airlines are avoiding its airspace,
long used as a shortcut.
Now planes will have to find another way.
Finnair says its route from Helsinki to Tokyo
could take four more hours.
Both Ukraine and Russia also specialize in moving heavy,
oversized cargo -- in planes from the Soviet era.
-It is certainly a significant complication
for certain industries.
Oil and gas is one.
The power-generating industry is another.
Aerospace and defense is a third,
where they'll have to face life without those jets
for a little while.
-Ukraine owned the world's largest plane,
but the government says it's been destroyed.
All of this means more stress on a supply chain
that's already fragile,
hit by huge spikes in consumer demand during the pandemic.
Now this.
-You can't rule out Russia, in extremis,
deciding that it actually wants to withhold the flow
of some of those critical commodities.
And that could start to become transformative
for global commodity prices and for specific industries as well.
-When you get to food and energy,
the part of inflation that everyone's concerned about,
it is here to say, those elevated prices.
And there's not much anyone can do about it.