Russian leader Putin’s recent decisions regarding Ukraine and the resulting geopolitical tensions are already having a strong impact on the diamond market.

According to reports, in India, around 8-10 biggest diamond enterprises controlled by Gujarati diamantaires are functioning in Russia, because of the war, supply to India has become uncertain. There is a shortage in supply of polished diamonds from the mines. the price of gold crosses ₹51,500 (which represent 682,10$ or 608, 29 €) per 10 gm which is the highest in 13 months but also the prices of diamonds increased from 15-20% in less than one week . That is because, the world’s largest rough diamond mining and distribution company called Alrosa is based in Russia.
If the situation remains the same for longer, supply of rough goods will stop, the price of gold and of polish diamonds will likely go up.

Alrosa is a group of diamonds mining companies specialized in exploration, mining, manufacture, and sale of diamonds. Alrosa accounts for almost 95% of diamonds production in the country and 28% of diamonds extraction worldwide . It is also one of the more than 90 companies and financial institutions, which included two of the country’s largest banks. Alrosa said in 2021 that the diamonds sector has fully recovered from the lost made during the pandemic and they expected to exceed $90 billion in 2021 which was an increase of 23% compared to 2020 levels but the political tensions already have a negative impact on the prediction . Since the military entry in Ukraine, many countries have sanctioned Russia . The US government has responded to Russian actions in Ukraine by imposing severe economic costs that will have short and long-term effects on the Russian economy and financial system.

Trade between the European union and Russia is significant. In 2020, 36,5% of Russia’s import came from the EU and 37,9% of Russia’s exports went to the EU. In 2020, the EU and Russia exchanges goods worth 174.3 billion. Russia is a vital partner worldwide but also a vital partner for Antwerp’s diamond trade. Recently EU leaders came together to decide the sanctions for Russia, but Belgium’s diamonds business and Italy’s luxury sector were two countries who voted against Russian sanctions, to avoid their own nations to suffer damages. In 2020, more than one billion euro of Russian diamonds passed through the Belgian port . Several logistics companies have already suspended services on all ports and transports hubs in until further notice. Many other companies will do the same if the conflict continue to escalate.

We expect trade with Russia to be critically disrupted. The invasion and sanctions may have political and financial effects that impact the diamond market and trade. The supply of rough diamonds is disrupted and due to the shortage of rough goods and production (polishing) we expect the price of diamonds to continue to rise. In recent weeks we have already seen an increase of around 25% on small diamonds up to 4 mm.

No further development is foreseeable at the moment, but whatever the historical period, diamonds are always a wonderful investment.







Diamond jewellery photo created by –