As Russia's war on Ukraine intensifies, key commodities including wheat, oil and metals are at risk, creating what Goldman Sachs believes could be the largest supply disruption on record. Part of the issue is that markets were already tight ahead of Russia's invasion as demand rebounded out of the pandemic. "The situation has deteriorated and as long as there's uncertainty around a conclusion on this outcome, the risk is to the upside across all the commodity markets," Jeff Currie, global head of commodities research at Goldman Sachs, told CNBC's "Squawk Box" Friday. "The situation was bad coming into this because you had very low inventories, very little spare capacity...You put that together with this disruption that is potentially the largest disruption we've ever seen in commodities, creates a lot of upside risk," he added. While a lot of attention has been focused on spiking oil prices, Currie said the more worrisome commodity to focus on is wheat. Wheat futures are up more than 30% this week, and are on track for the biggest weekly surge on record. Russia and Ukraine are among the largest wheat exporters. Oil prices, meanwhile, have been surging given Russia's key role as a producer and exporter of energy. Prices first topped $100 per barrel last Thursday when Russia invaded. Yesterday global benchmark nearly hit $120 per barrel. Metals prices are rising too. Aluminum hit a record high, while nickel traded at the highest in more than a decade. "The longer [the war] goes, the higher the probability that oil and commodity exports go to zero because when you think about the idea of a central bank asset freeze, in the context of an energy carve out, the two cannot coexist," he said. "I can't come up with a sustainable outcome...which suggests that the risk are very much skewed to the downside on exports of commodities, which then skews the price risk to the upside," Currie added.
