Increased Crude Prices amid Russia-Ukraine Conflict resulted in a hike in the Prices of Paraffin Wax in China

As the military conflict between Russia and Ukraine remains furious for the fifth day, which started in the early hours of Thursday, February 24th, it continues to threaten the global supply chain, which is recovering from the unprecedented outbreak of infections. Russian troops invaded Ukraine across many fronts just after the few days Beijing Winter Olympics ended, which resulted in the elevated global equity markets and skyrocketing energy prices. This Russia-Ukraine war is likely to result in another round of shortages in the world, along with the price hikes at a time when inflation is already a major concern for countries all over the world, thereby impacting industries and enterprises at large. Russia is the world's second-largest oil exporter that sells crude and natural gas to several countries, including China.

The prices of Brent crude oil have climbed by 0.9% to $98.88 a barrel on Tuesday over potential supply disruption for the first time in 8 years as the crises have sparked fears of a disruption to the region's critical energy exports. According to a senior Oil market analyst, "The fragile situation in Ukraine and financial and energy sanctions against Russia will keep the energy crisis stoked and oil well above $100 per barrel in the near-term and even higher if the conflict escalates further," which will, in turn, impact the pricing of several crude downstream products in the global market.

As per ChemAnalyst, the prices of Paraffin wax are consistently rising in the Chinese domestic market on the back of the increased demand post-Lunar New Year lull and skyrocketing upstream crude prices. After the markets in China gained momentum later in the second week of February after a week-long Spring Festival holidays, the demand for Paraffin wax has also increased substantially. However, the prolonged port congestions along with high freight charges continue to bother the domestic as well as international market sentiments. The escalated tensions between Russia and Ukraine could worsen the trade activities from China, especially to US and India.

With the severely disrupted global transportation in the aftermath of the pandemic, the war is likely to create further problems in the forthcoming period. The transport modes that are expected to be affected include ocean shipping and rail freight.