Pratima Desai, Nigel Hunt, Nina Chestney

LONDON, (Reuters) – Commodity prices jumped to new multi-year highs after Russia invaded Ukraine on Thursday. This raises the risk of tighter supplies because of the possible sanctions against Russia, disruptions in transport and Moscow withholding supplies.

Russia attacked Ukraine on Thursday with a massive invasion by land, sea and air. This was the most serious attack of any state in Europe since World War Two.

It is home to 10% of the global oil supply, one third of Europe’s natural gas, and together with Ukraine it makes up 29% of all world wheat exports.

Russia holds a 40 percent market share and is the biggest supplier of palladium in the world. Russia supplies 10% of the global nickel supply, and 6% for aluminium.

Oil rose over $100 per barrel, UK and Dutch Gas rose approximately 40%-50% and wheat shot up to a 9 1/2 year high. Corn climbed to an eight month peak, while aluminium shot to records.[NG/EU] [O/R] [GRA/]

As investors switch to safe-haven assets, the palladium price soared to seven-month-highs in precious metals. Gold soared to near an 18-month-high. [GOL/]

Western countries will put forth tough, coordinated sanctions against Russia Thursday. It is likely that banks will be the first to respond.

The sanctions could also affect Russian energy exports. Commerzbank analysts (DE:), stated that the U.S. had ruled out this possibility two days prior.

It is impossible to exclude supply disruptions if Russian sanctions impact payment transactions and Russian banks.

Russia’s exports of commodities could be affected if Western bank buyers cannot open letters credit to pay for their purchases.

Four trading sources reported that at least three of the largest buyers of Russian oil were unable to obtain letters of credit from Western banks on Thursday to pay for their purchases.

Gazprom (MCX) Russia’s state-owned gas monopoly Gazprom said Ukraine had normal supplies and that Ukraine hasn’t suffered any damage to its energy infrastructure.

The Azov Sea suspended vessel movement, but ports in the Black Sea, where most of the grain and oilseed exports are made, remain open.

Russia, Kazakhstan Azerbaijan, Turkmenistan and Azerbaijan each ship around 2-3 million barrels per daily, which is 2% to 3% of total global supplies to the markets via Black Sea.

Rusal is the largest outside of China producer of aluminium, representing 6% global production. The Black Sea also serves as a transport route for metals like aluminum.

Analysts at Natixis stated that “metal prices could be severely affected by Western-imposed sanctions and Russian ‘weaponization” of metal exports.”

Companies that make goods ranging from semiconductors to jet engines warned of possible shortages in key raw materials. A Coca-Cola (NYSE) bottler and Carlsberg (OTC) brewer shut down their Ukrainian plants.