27

Jun

Freight rates, in addition to other rates across several industries, have been fueled by the invasion of Ukraine by Russia, as well as a global uptick in demand in a post-Covid economy for diesel, gasoline, and jet fuel. Gas prices are coinciding with a profit boom for the owners of tankers that carry petroleum products. Container shipping, primarily, has seen the largest profit gains from these supply chain impacts. The question most experts are asking when it comes to these price increases, is whether or not these gains can be specifically attributed to the war in Ukraine, or if they’re normal, fundamental changes. “Some are still skeptical of the sustainability of an upturn under the premise that the recent strength is purely a function of disruption resulting from Russia’s invasion of Ukraine,” noted Evercore ISI analyst Jon Chappell. Others seem to disagree, such as the executives at Scorpio Tankers, a notable petroleum tanker shipping company. Scorpio’s head of chartering, Lars Dencker Nielsen, went on record to counter Evercore by stating, “much of the market recovery today was already underway even before the war began and that the true impact of the redrawing of the product trade map [due to the war] is yet to come later this year.” An article published by American Shipper examines both sides of this argument closely.

To read the article, click here.

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