Ukraine: Fuel and general transport among hardest hit sectors

The energy and transport industries are among the worst affected by the situation in Ukraine, according to an editorial article in The Maritime Executive.

The two sectors are set to be among the five hit hardest by the conflict, which began on February 24, with severe disruption to ground, ship and air transport; and price rises two of the notable impacts.

Many European countries are ‘heavily dependent’ on Russian energy, particularly via gas pipelines and while the article said a complete suspension of Russian gas flows is currently ‘unlikely’, ‘even small disruptions will have a significant impact. Global gas reserves are low because of the pandemic and energy prices are already rising sharply, impacting consumers and industry’.

As gas is essential to the smooth running of many supply chains, ‘disruptions to such a fundamental supply will have widespread economic consequences’. The news source cited the example of fertiliser factories shutting down in 2021 when energy prices surged. This, in turn, led to a shortage of carbon dioxide, which is vital to medical procedures and keeping food fresh.

‘Such consequences are likely to magnify with rising oil and gas prices,’ said the report.

And, while transport networks around the world are still reeling from the impact of the pandemic, a war could also impact transport, particularly sea and rail freight.

Rail freight between China and Europe has been established for the past decade and, while it still only accounts for a small percentage of the total, it has grown since the recent disruptions to sea freight.

As trains are currently being routed away from Ukraine, some believe disruption will be reduced. ‘However, countries like Lithuania are expecting to see their rail traffic severely affected by sanctions against Russia,’ said the report.

‘Although container shipping in the Black Sea is a relatively niche market on the global scale, one of the largest container terminals is Odessa. If this is cut off by Russian forces, the effects on Ukrainian imports and exports could be considerable, with potentially drastic humanitarian consequences.’

As the situation progresses, business for movers in Russia is set to be impacted as the result of international sanctions against the country.

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