Global crisis looms

Market contagion spreads beyond energy as the situation in Ukraine deteriorates

“What is happening in the financial and asset markets defies adequate description.” – John Mangun

The news agenda is moving almost too fast to analyse. It’s been a hectic week in commodities markets. This edition focusses on near-term market events but in scope goes beyond energy, because all the indicators suggest we are on the brink of a crisis that could eclipse the events of 2008-9 in breadth, depth and longevity of impact.

In this issue:

💥‘Homeless’ Russian oil goes into floating storage

💥Oil market on cusp of catastrophe

💥Nickel margin call points to wider commodities malaise

💥Grain crunch stokes fears of Arab Spring 2.0

💥Russian forces attack Ukraine’s gas transmission system

💥Climate concerns confound EU-US LNG pact

📰Also worth reading

💬Tweet of the week

💭Final thought

💥 ‘Homeless’ Russian oil goes into floating storage

Sanctions against Russian energy exports are yet to bite fully, but when they do the effects could be profound. Russian seaborne crude exports were ~4.9 million barrels/d as of 9 March 2022, well within the 3.9-5.3 million b/d average range since the start of the year, according to Kpler.

Buyers are pre-emptively shunning cargoes, but physical loadings of Russian crude oil are unchanged because more volumes are ending up on the water. The trend of ‘self-sanctioning’ is the prelude to greater disruption, which is ‘baked in’ now that the US and UK both banned imports of Russian oil.

Kpler head of research Alex Booth had this to say: