The cost of shipping has added another variable to the complicated global inflation and energy crisis. According to the Baltic Exchange data as reported by Bloomberg, hauling rates have reached a high not seen since April 2020.
The TC-5 passage commonly used to transport fuel from the Middle East to Japan cost around $61 per day in February. That same voyage costs an alarming $50,000 per day. Shipping costs from the US to Brazil on route TC-18 spiked from $3,800 per day in February to a high of $37,000 daily. The world is reliant on these fuels, and demand is expected to rise 6% this year alone.
Europe shot itself in the foot by eliminating its usage of Russian oil. The US and Canada similarly created their own energy crises by becoming reliant on fuel imports. A tax holiday or similar temporary bandage will not help the ongoing crisis that will certainly last beyond the Russia-Ukraine [and West’s proxy] war.