The global energy markets have been redrawn dramatically in the space of less than a week since Russia invaded Ukraine with the world’s largest country effectively becoming a pariah state for western energy consumers. China looks set to receive Russian oil and gas at very cheap prices compared to the west in the months ahead.
Shell has joined bp and Equinor in exiting the Russian energy scene while the UK has banned Russian ships from calling on its shores, something the European Union is also mulling having already denied Russia access to European air space and France having detained a Russian roro on Saturday morning. Canada has banned all oil imports while the country’s dockworkers have written to prime minister Justin Trudeau saying they will refuse to move any Russian cargo. Dockworkers in New Zealand have intimated similar moves.
The entire Russian energy sector increasingly is a no-go zone
“All of this means the entire Russian energy sector increasingly is a no-go zone amidst Russian ownerships ending up as stranded assets,” a daily markets update from Norwegian brokers Lorentzen & Co stated this morning.
It is not just states taking actions against Russia. In addition to moves such as the Canadian dockworkers mentioned above, there are also reports of pilots refusing to work any Russian ships, while nearly 8,000 people have viewed the video posted on YouTube on February 26 by Alexey Luchyno, a Ukrainian master, who refused to proceed to load his ship in a Russian port, and suggested his fellow sea officers — Ukrainian or not — can act in the same way, with or without the authorisation from shipowners.
“There are two options — either they will replace me, or the charterer will not go to the Russian port,” Luchyno said.
The Russian invasion has sent energy prices spiralling upwards. Global average bunker fuel prices reached $803.50 yesterday, the first time they have ever broached the $800 per tonne mark.
Russian forces continue to bombard Ukraine’s main port cities with all the country’s ports closed since last Wednesday.
For all the news on how the invasion of Ukraine is affecting global shipping, check out Splash’s dedicated coverage here.