Impact of Disruptions and Geopolitics on Supply and Demand Dynamics

Jakub Walenkiewicz, senior market analyst at DNV, highlighted the impact of disruptions on the shipping market during a recent seminar. He emphasized how unpredictability in the industry has driven recent key market developments, especially on the supply side. Walenkiewicz noted that shipping markets have been fueled by capacity constraints, leading to unprecedented cash surpluses in the sector.

In his analysis, Walenkiewicz challenged traditional economic models based on demand forecasts, stating that the current market dynamics are not solely driven by supply and demand principles. He discussed how recent geopolitical events, such as the Russian invasion of Ukraine and disruptions in the Red Sea, have significantly influenced shipping markets. The market has seen cash accumulation and booming sectors like tankers and container ships, with tonne miles surging due to shifting cargo flows.

Walenkiewicz also addressed the impact of Covid-induced spending patterns on container operators and highlighted the oversupply of tankers due to longer voyages following the Ukraine war. He touched on the rise of the shadow fleet transporting Russian oil in violation of sanctions and the challenges faced by gas tankers navigating longer routes. The analyst refuted the traditional shipping market cycle of “one good year followed by seven bad years,” pointing to the current trend of above-average earnings across different market segments.

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