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Why the Black Sea Matters to Commodity Markets

A main artery for the transport of commodities that play a pivotal role in any commodity market, is the Black Sea. At the crossroads of Europe and Asia, the Black Sea is gaining attention, now, not due to its vital existence to the commodities of crude and refined oil, but because of its proximity to Ukraine. At least six countries touch the shores of the Black Sea, but this waterway is important to more countries beyond this number. 

Commodity Market Trade

Products of crude and refined oil come from Kazakhstan, Azerbaijan, and Russia. It is mandatory for these commodities to pass via terminals on the eastern border of the Black Sea. On the western front, rest countries that depend heavily on ships that haul crude oil to meet their requirements of energy. Commonly referred to as one of the ‘breadbaskets’ of the world, the Black Sea and its surrounding region is responsible for supplying a million and more tons of vegetable oil and grain, all passing through the ports in the area. Hence, in the sphere of real time commodity trading, the Black Sea is essential for important commodities to reach destinations and for their trading to take place.  

Exports of Crude Oil

If you need more convincing about the relevance of the Black Sea in commodity trading, then there’s news for you. Crude oil is the single most important commodity that is traded today. It is also much in demand all over the globe. Exported from the source of three primary terminals that are located on the east coast of the Black Sea in Georgia and Russia, the majority of shipments of crude oil are at risk of breaks in shipments from further away. The exporters of Kazakhstan have a lot to lose if there is any mishap with tanker traffic in the heart of the Black Sea. The Caspian Pipeline Terminal, just off the north of Novorossiysk, a Russian port, manages to handle the transportation of roughly 1.3 million crude oil barrels in a day. This is delivered by pipeline from Kazakhstan. Russian crude oil barrels account for a huge amount of barrels too, some 400,000 per day. Crude oil reaches many parts of Europe through the pipelines via the Black Sea. 

Crude Oil Imports

Among countries that import crude oil from ports along the extensive coast of the Black Sea are Bulgaria and Romania. These account for some 200,000 barrels every day. While you undertake online commodity trading, you are probably not aware of how much crude oil is passing through the Black Sea in terms of export and import. The commodity market is, of course, not solely composed of the segment of crude oil, but other commodities like agricultural products. However, crude and refined oil products make up a bulk of commodity trading products, and central to the export and import of these, is the Black Sea. It has a number of major terminals and minor ones along its edge and these play a key role in the seamless export and import process. 

Invest in Commodities

The Black Sea is a prime waterway that facilitates the means of  transport above water and below it. Ships carry cargo from eastern parts of Europe to the west and the commodity market has seen an uptick  in the recent past. If you wish to invest in it, then Motilal Oswal is the place to go to. With handy hints and expert blogs and videos, you can learn and gain profits from the world of commodity trading. 

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