Russia's invasion of Ukraine has had an immediate and dramatic impact on prices of essential goods around the globe.
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For Australians that impact will be felt most immediately at the petrol pump and supermarket aisle.
In Australia, prices of petrol were already high before the conflict heated up. This has been driven by the global economic recovery from COVID-19, as people begin to move more and businesses transport goods through the economy.
The five-city capital average Australian petrol price was $1.70 per litre two weeks ago when the global benchmark oil price was $US90 a barrel.
JP Morgan expects the price of oil to increase to $US125 due to outright conflict combined with punitive sanctions. This would increase the price at the bowser to $2.10, however according to Dr Vlado Vivoda, senior lecturer in strategic studies at Deakin University the price rise is not linked to actual shortages in the market, but speculation of future disruptions.
"This is what's behind the price rally. Not an actual shortage but the fact that there's the potential for supply cuts to happen or Russian exports to be blocked at some point," Dr Vivoda said. "It's a jittery market reaction to what ifs."
Russia is the third largest exporter of crude oil, after the United Arab Emirates and Saudi Arabia, and as the global oil market is interconnected, the potential for Russian exports to be blocked would have the potential to increase global oil prices.
Despite the impact this would have, Dr Vivoda said it would be unlikely that Russian oil supplies would be cut off, either by the Russians themselves or by the West.
"It is going to hurt the West as much as Russia because Europe gets about 30 per cent of its oil from Russia."
In addition, many western oil businesses operate in Russia or have investments in Russian oil companies.
Another key commodity is natural gas, of which Russia supplies a large portion of Europe's demand. Any disruption to the gas trade in Europe would have little effect locally, as Australia has abundant gas reserves and is in fact the largest gas exporter in the world.
Where this could come into play would be if Australia started exporting its gas to Europe, rather than its traditional markets in Asia, to shore up Europe's energy needs.
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Again, however, the actual trade of wheat is yet to be significantly affected, and price rises are a reflection of market speculation, according to Dr Brendan Rynne chief economist at KPMG.
"It's about future disruption and those looking to secure existing supplies that are in the open market."
Australia is the sixth largest global wheat producer and if prices were to continue to rise - whether through speculation or actual disruption - grain producers would see increased profits.
For consumers, this will be realised in higher prices at the supermarket, both for flour itself and other finished food products that rely on wheat.
The combination of higher oil and wheat prices will increase inflation pressure in the economy that is already dealing with high prices.
"The current high prices are feeding their way into all parts of the economy. When we break the Australian economy down, we break it into 114 different sectors and when you look at transport that requires oil, that touches every single one of those 114 sectors," said Dr Rynne.
"The price of oil hits households, either directly through the cost of filling up your car, or through the cost of increased transport costs for the goods and services that you purchase."
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