“The wages of the righteous is life, but the earnings of the wicked are sin and death”
[Mar.26.2022] As Russia’s invasion of Ukraine continues for a month, global energy and food prices such as crude oil, natural gas, and wheat have soared, and the disruptions over the global supply chain have worsened.
The fears of global stagflation such as the ‘oil shock’ in the 1970s are increasingly weighing on the global economy. Concerns are growing that consumer prices in each country, which have already risen to the highest level in decades due to soaring energy and food prices due to the war, will soar further and the global economy will fall into a recession.
International oil prices jumped more than 40 percent from the beginning of the year. Russia accounts for about 7% of the world’s oil and refinery exports. Analysts such as Goldman Sachs and Barclays predicted that international oil prices could rise $200/barrel this summer.
Natural gas is also in a serious situation. Russia is the world’s largest natural gas exporter as of 2020, and the EU relies on Russia for about 40% of its natural gas. Dutch TTF natural gas futures, which represent the price of natural gas in the European market, soared to 345 euros (MWH), the highest price ever, earlier this month.
Since then, the upward trend has calmed down somewhat, but as of that day, it has maintained a surge of about 40% compared to the beginning of the year of 98 euros.
The Ukraine war is already bringing about a food crisis in poorer countries, pushing world food prices higher, which have already risen to their highest level in decades due to supply chain disruptions caused by Covid-19. Wheat is a crop that Ukraine and Russia account for about 29% of world exports. Russia is the world’s largest wheat exporter, and Ukraine is considered the ‘breadbasket of Europe’.
Corn prices, where Russia and Ukraine account for about 14% of the world market, have risen about 27% since the beginning of the year, and soybeans have risen about 28% this year. The World Food Price Index compiled by the Food and Agriculture Organization of the UN(FAO) already reached an all-time high of 140.7 in February, and the figure is expected to rise further after March when the effects of the war intensified.
The global supply chain turmoil, which began after the Covid-19 outbreak, is further exacerbated by Russia’s invasion of Ukraine and subsequent sanctions from the West. First of all, as container ships traveling to and from related areas such as Baltic Russian ports have changed their anchorages to nearby ports, cargo volume is increasing in ports such as Estonia, Latvia, and Germany.
Last year, as shipping between Asia and the West was delayed due to the global logistics crisis and costs soared, rail transport through Russia emerged. However, the rail transport volume affected by the sanctions is estimated to reach 1.5 million containers per year.
There is no good alternative to rail transport. Container ship freight rates are already at a premium, and Russia’s skyway is also blocked by sanctions from the West. Russian airspace is the shortest route linking Europe to the Pacific Rim, but it has no choice but to bypass it.(source: Yonhap News, Gotradingasia).
The wealth of the rich is their fortified city, but poverty is the ruin of the poor. The wages of the righteous is life, but the earnings of the wicked are sin and death.(Proverbs 10:15-16)
Dear God, please help the nations that are in crisis due to supply disruptions and price spikes in crude oil, national gas, and wheat due to war. We pray that Russia will quickly end the war so that its people will be spared from tribulation, and that blocked trade will flow smoothly. Please, remember the poor countries that are in desperate need of help from the international community so that their bodies and souls come to life as the aide can be provided through the hard work of the righteous.
Prayer 24·365
prayer@prayer24365.org
