Hemisphere Capital Management Inc.


The Geopolitical Divide

The events of February 24, 2022 shocked the world as Russia launched a large-scale military offensive in Ukraine. The U.S. and its allies responded with sweeping sanctions and boycotts to hamper the Russian economy. They have stopped short of engaging in a direct conflict with Russia at the risk of further escalation. While a resolution may be on the horizon, the impacts of the conflict have been wide-ranging across industries and felt globally. Humanitarian crises are arising in neighbouring countries as almost 4 million refugees have fled Ukraine while commodity shortages from export restrictions have ripped through global supply chains.

Russia is the world’s second largest exporter of crude oil and the largest source of natural gas for European Union nations. Restrictions and boycotts on Russian energy exports pushed energy commodity prices to levels not seen since 2014 – with West Texas Intermediate (WTI), a benchmark for North American oil, exceeding $100 USD/barrel…