Temporary Fluctuations Disrupting the Market

As Russia’s war with Ukraine continues, hopes for a better crude oil market waned. In recent weeks, Russian oil exports have declined and cross-sectional fluctuations have continued to disrupt the market. This has caused energy and fuel prices to rise around the world.

Disorders in the supply chain and price pressure are still continuing due to the Covid persistence. The IMF (International Monetary Fund) announced on Tuesday that the consequences of the war would significantly reduce global economic growth this year. It seems that Inflation and the rise of general prices will occur.

Demand for base oils and recycled oils has declined due to market uncertainties. Rising production costs seem to have turned into higher prices for downstream consumers, which has disrupted trading plans.

On April 21, Iran’s oil products increased by 3% to 11% which caused disrupting the supply chain in the Iranian market.

Due to high demand for recycled oil, as well as ongoing supply and raw material problems, the price of recycled oil crossed $ 780 for the first time.

The economic crisis in Sri Lanka and the currency shortage in East Africa have also complicated international businesses.

High commodity demand and lack of liquidity in these countries have almost disrupted international trade conditions for them.

The status of the JCPOA agreement remains unclear and expectancies for a positive result are lowering. The exchange rate in Iran has been fluctuating upwards over the past week. This has raised doubts about the production costs of export products.

There is Demand for caustic soda and lubricants, but the supply chain issues remain. 

The price of caustic soda was reported to be above FOB $800 last week and the rate of paraffin wax was up to FOB $1,400.

Logistics crises due to Covid-related quarantines in China, restrictions on vessel movement, and an evacuation schedule have left some congestions in ports. Empty containers were ready to be loaded at several ports but it was not possible to reload. 

Rising fuel prices have also boosted shipping rates. The news suggests that from the 1st of May, we should wait for the GRI changes on shipping costs. The amount of the change is still unknown. 

This article was prepared by Tina Taghavi, the account manager of Infinity galaxy. (www.Infinitygalaxy.org)