While a U.S. ban on Russia’s oil supply is drawing attention, we should not overlook the country’s position in the metals market, particularly nickel. Just this week, as the Ukraine invasion escalated, nickel prices tripled, and the London Metals Exchange cut off trading. Why in the world do nickel prices matter so much?

Nickel is important for any number of reasons. It’s used to make stainless steel, which we use in everything from bridges to cutlery. 

But in terms of the green transition, it’s a critical material because when you’re making something with green tech, whether it’s a wind turbine or an electric vehicle, you need a lot of metals that are good at conducting and resisting electricity. Nickel makes the list. 

A lot of folks are concerned that Russia was able to do what it’s doing because of fossil fuel sales. And that’s absolutely true. Russia is the top exporter of natural gas. The second is exporter of crude oil and the third largest exporter of coal. Collectively that’s over half of government revenues. 

So that argument is sound, but that doesn’t necessarily mean that Russia’s absence is going to push us towards a greener future.

Because we understand the supply chains of petroleum and natural gas. You know, you need to deal with Russia and Venezuela and Iraq and Iran and Saudi Arabia. But if you want to switch to green tech, you have to replace that one complicated supply chain with 13 others, that are, if anything, even worse involving 40 to 60 different countries, based on what you’re looking at, one of which is typically Russia, because Russia is absolutely integral to the nickel market, to copper, to aluminum.

Can’t live with them. Can’t live without ’em. 

Bottom line of all this:

We’re looking at higher energy prices for the foreseeable future ’cause as many as 5 million barrels a day of Russian crude is gonna be coming offline very soon. And that doesn’t mean we can move to a green transition. We have to find a new technology, a new battery chemistry, that allows us to avoid the Russian system.

Since Russia is the physically largest country on earth, and so has a lion’s share of materials, that’s gonna be a very, very heavy carry from an energy point of view. We really are kind of in the worst of all worlds right now.