Sanctions roil commodity prices

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news that with market price volatility in just about everything, we have  seen some unprecedented leaps before market forces steadied.</p><p>First up, the United States has <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/08/fact-sheet-united-states-bans-imports-of-russian-oil-liquefied-natural-gas-and-coal/" target="_blank"><strong>banned</strong></a> imports of oil, natural gas, and coal from Russia. This has shifted the international market price signals dramatically in the past few hours. At the same time, they are releasing significant flows from their own strategic oil reserves, ramping up domestic production, and using this shift to encourage a transition away from fossil fuels. It is a brave move because there is probably <a href="https://tradingeconomics.com/united-states/economic-optimism-index" target="_blank"><strong>no domestic political upsides</strong></a> from this in terms of short-term inflation.</p><p>And the EU is <a href="https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_22_1616" target="_blank"><strong>ending its reliance on Russian gas</strong></a> as more countries in the region rally to harden their response to the invasion of Ukraine, even at severe costs to themselves.</p><p>But China is <a href="http://www.ce.cn/xwzx/gnsz/szyw/202203/08/t20220308_37385209.shtml" target="_blank"><strong>objecting</strong></a> politically to bans on Russian trade. The Europeans are ignoring their advice. The Russian are warning of US$300/bbl oil but that is just being seen as propaganda. Even the Venezuelans are turning away from Russia.</p><p>In Ukraine, Russia is targeting civilians, especially those fleeing the fighting - even those fleeing east. Now more than 2 mln have fled the fighting for safer havens outside the count