. As fuel scarcity may linger in Nigeria
The International Monetary Fund (IMF) has expressed “grave concern” over the worsening conflict between Russia and Ukraine.
Besides the human toll and suffering of ordinary people, the IMF believes the conflict is also having a serious economic impact, which will worsen the longer it continues.
In a statement on Friday, the IMF Managing Director, Ms. Kristalina Georgieva, noted that “This crisis comes at a delicate time, when the global economy is recovering from the ravages of the COVID-19 pandemic, and threatens to undo some of that progress.
Indeed, Georgieva reiterated that “Beyond Ukraine, the repercussions of the conflict pose significant economic risks in the region and around the world.”
She added that the Fund is “assessing the potential implications, including for the functioning of the financial system, commodity markets, and the direct impact on countries with economic ties to the region.”
Global upheavals
Already, the escalating war between Russia and Ukraine has sent oil prices to new highs, with the Bonny Light breaking the $100 per barrel resistance level on February 24 for the first time since 2014.
As the United States and European allies of Ukraine continue to tighten sanctions on Russia, oil traders are concerned about the prospect of supply in a market where demand is rising rapidly, as factories and broader economies open up to recover from the doldrums of COVID-19 restrictions.
Furthermore, the cost of shipping crude oil on super-sized tankers from the United States Gulf Coast to the United Kingdom and Asia surged after attacks on vessels in the Black Sea unleashed a risk-based premium into global shipping markets.
According to Bloombergquint.com report, tanker rates for so-called Very Large Crude Carriers that can carry about two million barrels of crude from the US Gulf Coast to the Asian market jumped to about $7million on Friday from $4.4million just three days ago, according to two shipbrokers familiar with the trades.
They also said that rates for booking vessels that carry oil to the European market rose to more than $2.75million from about $1.6million they said.
Beyond Ukraine, the repercussions of the conflict pose significant economic risks in the region and around the world.
Fuel scarcity
While analysts believe that the Russia-Ukraine war presents an opportunity for African oil and gas producing countries to ramp up production and offer an alternative market to Europe.
However, this may not be the case for Nigeria, currently experiencing dwindling production amid importation of refined petroleum products, as it is feared that the war could hinder the movement of vessels conveying refined products from leaving refineries in the warring region.
As a result, the fuel scarcity situation being faced nationwide may further be prolonged despite assurances by the Nigerian National Petroleum Company Limited (NNPC) that it has sufficient stock of products.
NNPC in a statement on Friday said it “is further intensifying efforts to resolve distribution hitches being experienced in some parts of the country due to logistics issues.”
It added that it is “engaging depot operators to load products round the clock to accelerate the restoration of normal distribution.”
