FX.co ★ Oil shortage to cause food crisis

Following the energy crisis, the world may face a food crisis. Notably, the reason for both crises is the same – the ban on Russian oil imports. Analysts warn that the boycott of Russian oil could trigger a food crisis in many European and other states.

The Times has recently unveiled a gloomy forecast of the Bank for International Settlements (BIS). According to the forecast, the ban on Russian oil is likely to lead to a global food crisis. Restrictions on Russian oil are an important part of Western sanctions. Analysts reckon that a complete embargo on Russian oil could bolster demand for grain as biofuel in the EU, which in turn could aggravate food shortages.

Apart from the food crisis, the boycott is sure to boost global oil prices. Therefore, prices for agricultural crops will rise as well.

The United States was the first country which imposed a ban on Russian oil imports in early March. In June, the European Union did likewise. The EU banned the import of Russian oil by sea. The embargo will come into force in a few months. Recently, the EU and the US have been discussing an initiative to put a price cap on Russian oil.