20 MARCH 2022

The ongoing war in the Ukraine will definitely cause significant disruptions to trade patterns in and out of the conflict zone as well as to global shipping routes. The 'Chart of the Week' displays Russia's share in seaborne energy exports, starting with around 15 percent of global seaborne exports of steam coal and around 8-9 percent of seaborne exports of coking coal, crude oil, and gas. If the EU and other OECD countries really want to become more independent of Russian oil and gas in the future, they will have to look for alternative sources on the world market. At the same time, Russia will have to find other buyers. There is a viable chance that this shift in trade patterns may lead to higher tonne-miles and benefit crude- and product-tankers. At least, TCEs for crude- and product-tankers did a significant jump following the start of the Russian attack on the Ukraine. On the other hand, world economic growth is negatively impacted by sky-rocketing commodity- and energy-prices which drive up production cost and inflation. As alternatives to Russian oil may not be found quickly, world oil supply and demand may turn out to be lower than anticipated so far. Thus, the question is whether the expected tonne-mile effect can make up for a possible loss in transported volumes? We are inclined to tend to the benefits of the tonne-mile effect, hoping that production outside of Russia will be ramped up as quickly as possible.

Shipping stocks gained 1.7 percent overall last week. The liner sector did an incredible jump of 14.6 percent, followed at a considerable distance by the LNG- and container sectors. The Notos Maritime Sentiment Index continued its upward trend and is approaching its high of summer 2021. 

Our trading strategy lost 1.5 percent, falling behind its benchmark, the Notos Shipping Index (+1.7 percent). This is partly due to our prudence as we still hold a considerable part of our portfolio in cash. Furthermore, we are 'indirectly' engaged via short puts in the liner- and container-sectors and therefore could not participate as much from the rising prices in these sectors as with a direct exposure.

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This document contains forward-looking statements. We caution the reader that forward-looking statements are not guarantees of future performance. Past returns are no indication of future returns. The development of the industry, 
markets, and companies described in this document may differ materially from the forward-looking statement contained herein.

Information and opinions contained in this document have been compiled from sources believed to be reliable. Unless otherwise stated, any statements herein are based on our own estimates at the time of publication. Notos Consult GmbH makes no representation as to the accuracy or completeness of any of the information contained herein and accepts no liability for loss arising from the use of the information provided. 

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