A Brewing Commodities Crisis Could Push Up Shipping Costs Even More

A Brewing Commodities Crisis Could Push Up Shipping Costs Even More

Share to Linkedin A provocative report by Credit Suisse's Zoltan Pozsar that was making the rounds in certain corners of Twitter last week suggests that the Russia-Ukraine conflict could be a strong tailwind for shipping freight rates. The report features a lot of big thoughts, shipping rates being just one of them, so I'll try to keep things as simple as possible. According to Pozsar, Credit Suisse's head of short-term rate strategy, the global commodities market is facing a crisis due to the conflict in Eastern Europe and the international sanctions that have been piled onto Russia, one of the world's biggest suppliers of everything from natural gas to nickel to wheat. The price of commodities traded outside of Russia are now surging on a sanctions-triggered supply shock; meanwhile, those traded inside Russia have stalled in many cases, and crashed in others, since many of these materials have effectively been unplugged from the rest of the world economy. Here's one such example. Historically, the spread between a barrel of Brent crude oil (the global benchmark) and Russian Urals crude has been very tight, often differing no more than a couple of dollars per day. Ever since Russia invaded Ukraine, however,