The recent bedlam in energy markets has made still high ocean rates look like less of a problem.
LOGISTICS
Vessels boycotting Russia may be adding capacity to the rest of Europe, offsetting the congestion and demand that otherwise would push prices up, according to Freightos.
Rates remain at a high level but have decreased gradually going into March due to a slower than expected volume recovery, according to Flexport.
Shanghai – N. Europe benchmark air cargo rates have increased 34% so far in March to $8.37/kg, compared to the about $2.35/kg pre-pandemic norm, per Freightos data.
Fuel surcharges for Q2 from Asia to the US West Coast, for example, are expected to be $80/FEU higher than current rates. However, with Asia-Europe rates already at $13,495/FEU, the fuel component is a relatively small part of the total cost, said Frieghtos.
ENERGY
Insight: About 60% of Russia’s oil exports go to OECD Europe, and another 20% to China, according to the International Energy Agency (IEA). Most of the world is not dependent upon Russian oil.
In the UK, Russian natural gas makes up less than 4% of the nation’s supply. Russian imports account for 8% of total UK oil demand, according to the UK government.
For the US, Russian oil represented just 3% percent of total U.S. crude imports in 2021, according to the American Fuel and Petrochemical Manufacturers (AFPM).
U.S. President Joe Biden exhorted oil and gas companies not to “exploit” the newly announced (on Mar. 8) ban on Russian energy imports, stating that any “profiteering or price-gouging” that further spikes the pain consumers are already feeling at the pump will not be tolerated.
Cheaper prices for Russian oil could benefit China and other nations that choose not to impose sanctions on Russia.
PODCAST
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MARKETS
Although oil prices have surged from last week, they are retreating from highs hit earlier this week.
Fiber and yarn prices have remained stable, despite volatility in other commodities.
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