Global Perspective: Affected By The Wudong Incident, The Price Of Brent Crude Oil Has Soared To US $100 / Barrel

Price and supply and demand are two-way constraints. The relationship between supply and demand determines commodity prices, and prices are also restricted by many factors.

Recently, the turbulence in the relations between Russia and Ukraine has led to the rise of international crude oil prices. So, for textile workers, will this rise in crude oil prices have an impact on the textile and garment industry chain?
Event overview

　　 At about 3:00 a.m. local time on the evening of the 21st, and at about 3:00 a.m. on the 22nd of Beijing time, President Putin delivered a television address to Russia, announcing officially that Russia supports the "independence" of the two eastern Ukrainian States, namely Donetsk and Lugansk, and has signed a series of military and economic cooperation treaties with the governments of the two states, The Russian army will be responsible for the security of the two prefectures in Wudong.

A brief analysis of the historical causes of the Wudong incident

On April 4, 1949, the North Atlantic Treaty Organization (NATO) was established, which includes 12 initial members of the United States, Britain, France, Canada, Italy and other western countries. NATO has a large number of nuclear weapons and conventional forces, which is in essence an important military force of western countries. Before the end of the cold war between the United States and the Soviet Union, the number of NATO members increased to 16. In 1991, after the collapse of the Soviet Union, NATO has been expanding eastward. Today, there are more than 30 NATO members.

The relationship between Ukraine, Belarus and Russia

　　 The continuous eastward expansion of NATO has increased the pressure on Russia. Only Ukraine and Belarus have yet to join NATO in the western border of Russia As a result, Russia has been forced to make strategic adjustments, and its attitude towards the West has changed from "soft" to "thoroughly tough".

The location relationship between the Black Sea, the Turkish Strait and Russia

Before 2014, Ukraine had been swaying between "Pro Russia" and "Pro West". In March 2014, affected by the Crimea incident, Ukraine accelerated its approach to the West. Once Ukraine joined NATO, Belarus would be surrounded by NATO on three sides. It is not ruled out that Belarus may join NATO under the influence of economic sanctions, color revolution and other factors in the future, It's not what Russia wants to see. For big powers, once they lose their geographical buffer boundaries, they will threaten their territorial integrity and sovereign independence. "Ukraine cannot join NATO, which is Russia's bottom line.". Ukraine has a population of 41.58 million, of which 77.8% are Ukrainian and 17.3% are Russian. The "Pro Russian faction" and "Pro Western faction" are in constant conflict in Ukraine. The di Bernie River, the mother river of Ukraine, flows southward into the Black Sea. Along the way, there are six hydropower stations. The vast and fertile black land makes Ukraine the third largest grain exporter in the world and the granary of Europe. But Ukrainian crude oil. Natural gas and other resources are scarce, and 90% of them rely on imports. Russia, Kazakhstan and Azerbaijan were all oil suppliers to Ukraine. In order to ensure the safety of Russia's Black Sea fleet, Crimea, with the majority of Russians, voted to join Russia in March 2014. The task of the Black Sea fleet is to control the Turkish Strait Out of the Mediterranean to deal with the Sixth Fleet. If Ukraine joins NATO and Russia does not control Crimea, the Black Sea fleet will be locked up. There are two clear requirements for Ukraine to join NATO First, there must be no conflict between Ukraine and Russia. Second, there must be no territorial disputes between the two countries. If Russia Chen soldiers along the Ukrainian border and Ukraine chooses to go to war, it will directly lose its qualification to join the treaty.
The Russian freeze is bound to have an impact on the international financial market. The international crude oil price has reached its highest level since 2014. The Russian RTS index plummeted by 17% on the evening of the 21st, and the yield of treasury bonds has risen sharply. So, what impact will the rise of crude oil price bring to the textile and clothing industry?
Rising crude oil prices may affect polyester industry
As we all know, the crude oil textile industry chain takes crude oil as the source of production, with Px, PTA, pet, polyester filament, textile and other products as the main line. Petroleum is used as raw material to produce PX (p-xylene), and PX is used to produce PTA (purified terephthalic acid). PTA is an important bulk petrochemical product. PTA and MEG (ethylene glycol) are synthesized to produce pet (polyester). More than 90% of PTA in the world is used to produce pet. Global textile network price monitoring shows that affected by the rise in crude oil prices, PX, PTA, polyester chip prices have increased to a certain extent. However, due to the influence of price transmission factors, the rise and fall of crude oil price in the short term has little direct impact on textiles. The impact is mainly reflected in chemical fibers, dyes and auxiliaries, thus indirectly affecting the textile industry. In addition, from the perspective of supply and demand, the event has little impact on international crude oil supply. Whether the short-term geopolitical factors will continue to impact on the price mainly depends on the attitude of Ukraine and some Western powers.