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Ukraine War Update: Tanker and shipping stocks gain as Russia cuts Poland/Bulgaria gas

Oil Tanker

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Here are the latest headlines in the Russia-Ukraine crisis:

Tanker, shipping stocks gain on Russia gas cuts

Tanker and shipping stocks are rallying Wednesday on word that Russia is cutting gas supplies to Poland and Bulgaria. Big gainers include Grindrod Shipping Holdings (GRIN), Tsakos Energy Navigation (TNP) and Ardmore Shipping (ASC).

Danske Bank sees signs of escalation

“All in all, we think tensions are again building up and Russian offensive is likely to expand and become nastier in Ukraine over the next two weeks ahead of the May 9 Victory Day,” Danske Bank said in a note Wednesday. “We maintain our base case of a frozen conflict in Ukraine, but the tail risk of an escalation remains and the most recent developments raise the downside risks.”

“The main triggers for an escalation of the war outside Ukraine include: 1) NATO’s involvement in the conflict in one way or another leading to a direct confrontation with Russia and 2) NATO membership processes by Finland and Sweden that are likely to proceed over the coming weeks. While Russia is unlikely to deploy military force against the Nordic countries, it is likely to step up pressure by other means of warfare, e.g. hybrid, cyber and information warfare. Same time, the risk of direct military intervention by Russia now looms larger in Eastern Europe, particularly in Moldova.”

Weaponizing energy

“This is a turning point that has been accelerated by Russia today,” declared Piotr Naimski, Poland’s top official for strategic energy infrastructure. “This might well represent the preview of similar moves coming up vis-a-vis other European countries in coming weeks,” added Simone Tagliapietra, researcher at the Bruegel think tank. “European governments now need to deploy all emergency measures they have at their disposal, both on the supply and demand side to ensure security of supply.” European gas prices have already surged as much as 17% on the news, and in the event of a supply disruption, forward contracts could more than triple, according to Kaushal Ramesh, senior analyst at Rystad Energy.

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