The dam, 30 metres (yards) tall and 3.2 km (2 miles) long and which holds water equal to the Great Salt Lake in the U.S. state of Utah, was built in 1956 on the Dnipro river as part of the Kakhovka hydroelectric power plant.

It also supplies water to the Crimean peninsula, annexed by Russia in 2014, and to the Zaporizhzhia nuclear plant, which is also under Russian control and which gets cooling water from the reservoir.

The International Atomic Energy Agency (IAEA) said there was no immediate nuclear safety risk at the plant due to the dam failure but that it was monitoring the situation closely. The head of the plant also said there was no current threat to the station.

Eoin Treacy's view

Russia controls the area downstream of the dam and claims it as its own. It is also a major agricultural zone. By draining the reservoir, they sent a message the installation was a target. That action served the dual purpose of limited downstream destruction to Russian interests, while also flooding the battlefield.

Ukraine has been talking about its counter offensive for months but has been bogged down in Bakhmut. That allowed Russia to dig in along its frontier and to prepare counter measures to an attacking force.

Ukraine does not have the weight of numbers to claim large pieces of territory, so they have little choice but to try and cut Russia off from Crimea. The question of the cost in terms of men and material required to achieve that limited goal does not appear to have been discussed in the media.

If Ukraine fails in its objective, will they have sufficient reserves to try again, or will they need months or years to rebuild capacity? The unexpected outcome is Russia prevails, captures additional territory, and digs in ahead of winter. Against this background, it is reasonable to expect volatility and particularly in related commodities.

Wheat has rebounded over the last week to test the medium-term sequence of lower rally highs. A sustained move above 650¢ will be required to break the downtrend.

Crude oil markets are finely balanced at present with OPEC+ cutting supply and global demand looking uncertain. Adding additional geopolitical risk to the mix could prove to be the bull catalyst required to break the medium-term downtrend.