Russian actions in Ukraine will impact all areas of shipping, says BIMCO’s Rasmussen

The negative impacts of Russia’s actions in Ukraine would have consequences for all sectors of shipping, Niels Rasmussen, chief shipping analyst at BIMCO, has warned

While the future situation remained clouded with uncertainty, Rasmussen said that the immediate commodity price increases and supply challenges caused by Russia’s invasion of Ukraine were likely to be felt throughout 2022. In addition, the recently implemented sanctions on Russia were not likely to be lifted any time soon, and this could have a sustained spill-over impact on the global economy, he said.

Ukrainian ports were currently closed. Many shipping companies, although not immediately compelled to act by sanctions, have taken the independent decision to disengage from the Russian export and import markets.

Many other companies were divesting or putting their activities in Russia on hold. The EU was contemplating following the UK and banning Russian-owned vessels from the region’s ports.

With the global economy already suffering from increased commodity prices, the impact on supply of oil, wheat, and maize, all of which are key exports from Russia and Ukraine, saw all three products trading at decade highs at least.

Inflation, already in many countries at its highest level in memory, will be pushed even higher. Increased shipping costs due to historically high bunker prices would only add to the inflationary pressure. The increased prices might also lead to a destruction of demand as consumers and businesses have to allocated spending choices.

Rasmussen noted that “the National Institute of Economic Research in the U.K. has estimated that the war could reduce global GDP growth by as much as 1 percentage point. No matter the specific Russia and Ukraine export developments, this will hurt growth projections for all shipping sectors”.

Within Russia’s and Ukraine’s top export commodities the two countries combined hold a global market share of more than 10% within coal, wheat, and maize. Of particular concern to global supply was the export of wheat and maize, which is loaded mainly in the Black Sea.

Rasmussen observed that it was difficult to imagine that what was left of Ukraine’s 2021 harvest would be shipped any time soon and, depending on developments, the 2022 harvest might also be hit. How much of Ukraine’s export could be replaced by export from other countries remained to be seen, but to the extent that it was possible, it could lead to increased tonne miles demand.

Russia was a major player in both coal and wheat, although in these cases the majority were exported from Baltic and Pacific ports. None of the commodities were currently sanctioned. BIMCO believed that the Black Sea exports were at a higher risk of seeing disruptions “due to lack of shipping companies’ willingness to serve the area and/or increasing shipping cost”.

Top dry bulk export commodities ex Russia & Ukraine 2017-2021

Share of global seaborne export      Russia   Ukraine  
Black Sea Other Total Total Key Destinations  
Coal 3.2% 8.8% 12.0% 0.0% China (24%), EU (34%), Japan (13%)
Iron ore 0.5% 0.6% 1.1% 2.2% China (47%), EU (39%)
Wheat 6.0% 12.6% 18.6% 10.6% Egypt (20%), Turkey (13%), Indonesia (6%)
Maize 0.5% 1.0% 1.5% 14.7% EU (38%), China 18%), Egypt (10%)
Other 2.4% 2.6% 5.0% 1.3% EU (25%), China (21%), USA (10%)
Total 2.1% 3.8% 5.9% 1.9%  


Rasmussen said that, despite possibilities of increasing tonne miles demand for certain commodities, BIMCO believed that the war in Ukraine would be a net negative for the bulk market, driven by both a lack of commodity supply and reduced demand due to price increases”. He warned that “further steps to sanction some or all of Russia’s exports could cause further disruption, although we believe that China may continue to be a taker for Russian commodities”.

Unlike the bulk market, Ukraine was not currently a factor in the tanker market. Russia, however, controlled about 10% of all seaborne exports of both crude oil and refined products; the majority of which was exported from Black Sea ports.

The EU is the major taker of all Russia’s export and has so far taken no steps to sanction it; despite pressure from Congress, neither has the White House, yet.

European buyers appeared to be shying away from Russian crude oil; it was being reported that as much as 70% of crude exports did not have a current buyer, despite being heavily discounted.

Crude oil price futures indicated that prices would remain above $100 a barrel.

Rasmussen said that the high prices were likely to cause demand destruction, while supply shortages may also hurt shipping prospects.

“China could emerge as a buyer for Russian crude, which could help alleviate some of the current global supply concerns as the EU could in turn buy more from the Middle East,” Rasmussen said, noting that “this could lead to increased tonne miles demand but if the high prices are sustained, overall demand would still suffer. We therefore believe that the much-awaited rebound in the tanker markets will be further delayed and be more muted than otherwise expected”.

Top liquid export commodities ex Russia & Ukraine 2017-2021 (from

Share of global seaborne export   Russia   Ukraine  
Black Sea Other Total Total Key Destinations  
Crude oil 8.3% 1.6% 9.9% 0.0% EU (59%), China (32%)
Fuel oil 14.1% 4.5% 18.6% 0.0% EU (59%), USA (34%)
Gas oil 9.4% 5.3% 14.7% 0.0% EU (67%), Turkey (14%)
Gasoline 0.7% 1.0% 1.6% 0.0% EU (36%), USA (15%)
Other 10.6% 7.6% 18.3% 0.0% EU (56%), China (13%)
Total 8.5% 2.6% 11.1% 0.0%  

Container Market

Rasmussen said that many of the largest container lines had decided to suspend bookings to and from both Ukraine and Russia, despite no sanctions currently being in place. Neither Russia nor Ukraine were, however, key markets for the liners. Considering the very high global demand, the developments in the two countries should not be much of a concern for container rates or demand, Rasmussen said, while noting that “on specific trades the loss of Russia and Ukraine volume may, however, be felt and we believe that this may be especially on some reefer trades”.

He concluded that the impact of the war on the global economy and consumer confidence might weaken growth prospects. This could lead to an earlier “return to normal” from the current elevated demand, which in turn could ease congestion in ports. The impact, however, was likely some way off and in any case, longer-term contracts have already been signed at high rates.