Washington/London, April 13, 2024 – The United States and the United Kingdom imposed tough sanctions on Russia on Friday evening, targeting a key sector of Russian exports. The world’s largest metals exchanges, the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME), will no longer be able to enter into new contracts for Russian aluminum, copper, and nickel.
The move is another step in pressuring Russia to end its war in Ukraine. It also underscores the US and UK’s commitment to supporting Ukraine and weakening the Russian economy.
Impact on Russia
The sanctions will have a significant impact on Russia’s metals exports, which are among the country’s most important sources of revenue. According to the UK Foreign Office, metals are the second most valuable group of commodity exports for Russia after energy products. In 2022, Russia earned $25 billion from metals exports, and $15 billion in 2023.
Protecting Markets
In an effort to minimize the impact on markets, the sanctions do not apply to existing contracts for Russian metals on the LME and CME exchanges. This will help to prevent sharp price swings and disruptions to supply chains.
US, UK Reaction
US Treasury Secretary Janet Yellen called the sanctions “targeted and responsible” and said they would reduce Russia’s revenue without harming US and UK allies. UK Foreign Secretary James Cleverly stressed that the sanctions are part of the UK and its allies’ “relentless effort” to force Russia to withdraw from Ukraine.
Conclusion
The ban on Russian metals on the LME and CME exchanges is a significant step in the fight against Russian aggression in Ukraine. The sanctions will hit a key sector of Russian exports while also helping to protect markets from destabilization. This move sends a clear signal that the US and UK are determined to keep the pressure on Russia until it withdraws its troops from Ukraine.
Sources:
- London Metal Exchange: https://www.lme.com/en/
- CME Group: https://www.cmegroup.com/company/cme.html
