Western Embargo Against Russian Redraw Shipping Routes As Nigeria Comes Up With New Trade Policy With The Region

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By Stehen Ubanna

The North American country of the United States, US, and its allies economic and trade  embargo against the Russia Federation over its invasion of Ukraine appears ‘’to have reorganised global trade along political lines, defying geography and efficiency’’.

This new reality according to informed maritime sources has created a ‘’windfall for Merchant shipping and the risks are getting higher for European consumers and hunger for the people of the African Continent.  This disruption, a shipping source had said stems   from’’ the disturbing of the black sea trade by Russian forces’’.

The Russian forces had   blockaded the Ukrainian ports from land to sea, thus impeding shipping activities. Yorgos Gour-dmichalis, a shipowner, had told Reuters News Agency that about 100 foreignagged vessels were trapped at the Ukrainian ports on Friday, March 11, 2022, alone, stressing that more are still being trapped.

  Gour- Domichalis, had said that   the cargo laden ships were in the process of loading and unloading when the Russian forces invaded the country on Thursday, February 24, 2022, thus shutting down the system. This is because there were no Ukrainian Customs personnel and Harbour masters to process the vessels out.

Estonian vessel Sank By russian forces In The Black Sea In Ukraine

Given what is happening in Ukraine at the moment which is not favourable  for ocean-going vessels may have informed why the United Nations, UN, Maritime Agency, International Maritime Organisation, IMO,  has vowed ‘’to establish a safe corridor  for Crew evacuation, but stranded ships are currently being crewed by skeleton  Crews.

News making the rounds in Europe was that Some Merchant vessels were damaged by missiles and mine at the sea. One Estonia- owned ship   was said to have sank on Thursday, March 3, 2022. With the Russia-Ukraine war still ongoing, a ship owner had said that Insurance Companies have taken advantage of it to hike their rates . The vessels insurance rates cited by the value News shows that it now ranges between $4000,000 to $6000,000 a week but a normal rate  was said to be  closer to $80,000 to $120,000 a week.  It was not surprising why most dry bulkers are steering clear of the Eastern Europe because of the high insurance rates.

The situation is more worrisome as Ukraine has reduced almost 40% of the world’s sunflower seed oil, widely used in the food industry 15% of its barley and 10%of its wheat and maize. Indeed, the Russian forces blockade The Russian forces blockade of the Ukrainian port cities clearly shows that it cannot currently export these goods, forcing the European and African countries to look afield.  

Records from the National Bureau of statistics, NBS, shows that Nigeria had imported $434.62 million, equivalent of N144 billion, worth of durum wheat from Ukraine in 2021. The country was said to have also imported milk worth N721 million or $1.7 million from the war- torn Ukraine . It was said to have imported $84.3 million in capital imports from Russia  between  2019 and now.

The Russia-Ukraine war has affected Nigeria and the two East Europe countries which share mutual trade relations as both imports that have stopped since the outbreak of the war on February 24, 2022.  The United Nations, UN, had said that due to the conflict, Ukraine is going from being  the ‘’breadbasket of the worls to being  on the breadline’’.   

President Buhari:

Niyi Adebayo, a former governor of Ekiti state and minister of Industry, Trade and Investment, had said that the worrisome situation in Russia and Ukraine, the two former member countries of the defunct Union of Soviet Socialist Republic , USSR, may have informed why President Muhammadu Buhari, a retired Army General, had mandated  the ministry,  trade Department ‘’to analyze  the ongoing war  situation between Russia and Ukraine as it concerns trade  with Nigeria and come up with a result for approval.

 The minister had said  that officials of the trade department  would be  at all the issues involved  since the  war broke out and to look at what  the country imports  and export to the two  countries in return   with a view to coming out with a policy document.

He had said that  the new trade policy  with the two nations under  the former USSR, with which it shares mutual trade  relations,  would go a long way  ‘’ to  immune  the Nigerian economy  from the numerous economic and trade sanctions  from the US, European Union, EU, United Kingdom, UK and Canada, which is currently strangulating the Russian and Belarusian  economy .

Mohammed Bello Koko, the Managing Director, of the Nigerian Ports Authority, NPA,  at the instance of the Katsina state  born Nigerian President   was said to have perfected plans  ‘’to commence  a twenty –four  ports operations to solve  the challenge of port congestion  in Lagos ports arising from the Russian-Ukrainian war’’.

There is no gainsaying the fact that the on-going war between Russian and Ukraine which had affected trade between Nigeria and the two countries  that may have encouraged the Nigerian government   to intensify efforts ‘’to bridge the wide gap in sugar production.

Adebayo, who has been given a target by the retired Army General to ensure that in the next 10 years, the country would achieve 100% self- sufficiency in sugar production and also export sugar produced in the country to the West and Central African sub-regional markets including Europe and Asia is working towards achieving the goal.

I n a related development, the 27 member EU.economic bloc, are yet to agree  on the imposition of total sanctions on Russia over its invasion of Ukraine last February. The EU embargo on Russia, a source said, would require the unanimous approval from all the 27 member countries.

esScholz: Germany Chancellor, Warns Other Western Leaders Not To Take Hasty Step In Imposing Trade Embargo On Russia

 Olaf Scholz,  the Germany Chancellor,  whose country’s  economy had  depended so much  on the Russia oil and gas, was said to have warned other western Leaders  about the dangers  of taking ‘’hasty steps  to impose sanctions on Russia’’.

 The Germany Chancellor, may be reluctant to join other EU, countries in placing embargo on Russia on the grounds that ‘’it could  push the economy into recession ‘’.Russia Crude, has continued to account  for about 14% of the intake of Germany’s largest refinery , Miro, and 24%, which is 24% owned by  Rosneft.

 Even Germany refinery, OCK Scwedt, which is 54% owned by Rosneft, receives its Crude oil from Russia through the Druzhba pipeline. The land-locked Leuna refinery in Western Germany, which majority shares owned by  Total Energies, also  receives its Crude oil from Russia  through the Druhba pipeline.

But the following Germany Companies were said to have stopped buying Russian oil: KN Olen, Neste, Galp, Equinor, Baynoil, Eni, Eneos, and BP,   Commodity traders, such as  Trafugura and Vitol, were said to have continued  buying Russian Crude under existing  long term contracts.

Bulgarian refinery, allegedly owned by Russia’s Lukoil, also uses Russia’s Crude, which accounts for about 60% of its intake, was said to have continued to import the Russian Crude to keep the refinery busy.

 Note that as a prelude to ending the over one month-old war, Vladimir Putin, the Russian President may have kept to his words to cut back drastically the country’ military activity around Kyiv,  and Chernihiv  in the war torn Ukraine,  That  much was confirmed byColonel- General Alexander Fomin, the  Russian Deputy Defense minister on Tuesday, March 29, 2022,   after talks between  the country and Uraine Negotiating Teams in Istanbul, Capital of Turkey, at the instance of Recep Tayyip Erdogan, the Turkish President.

The Russian Deputy Defense minister had said that the decision to cut its military operations  in Ukraine was taken ‘’in order to increase mutual trust and create the necessary conditions for further Negotiations and achieving the ultimate goal  of agreeing and signing  an agreement’’. He had said that that the decision was made by a wide margin by the Kremlin ‘’to radically reduce military activity in Kyiv and Chernihiv direction’’.

Zelenskyy: Doubts Russia Deescalation Of The War

In spite of the fact that Russia had said that’’ it will fundamentally cut back’’ its offensive operations  near Kyiv and Chernihiv to boost trust and talks with Ukraine, Volodymyr Zelenskyy, the Ukrainian President  had said the promise was aimed at misleading its forces, stating that ‘’the country  will not reduce  its  defensive efforts’’.  He has urged the West ‘’to wait to see if the Russian will follow through on the de-escalation promise of the war before giving applaud to Putin for doing so. He has reason.

Hear him: Ukrainians have already learned during these 34 days of invasion and over the last eight years of the war in the Donbas region that the only thing that they can trust is concrete result. But the Britain’s ministry of Defense  in an intelligence update had aid  that ‘’it  is highly likely  that Russia  will divert combat  power  from the north  to their offensive  in the Donetsk and Luhansk regions in the east.

Vaily Nebenzya, the Russian envoy to the UN, had accused the West of ‘’fueling the conflicts by sending weapons to Ukraine’’.    

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