Global Oil Crisis and its Impact on Shipping Sector of Pakistan

The coronavirus has had an impact around the globe like never before. Last time during2007-08 global financial crisis the whole financial system based on debt collapsed and the economy fell into recession. The impact of the crisis was felt in every sector in Pakistan as well, particularly the shipping industry. This can be understood by an example. Pakistan National Shipping Corporation (PNSC) bought a ship in July 2008 for $72 million. In September 2008 the price of a Capesize ship (largest dry cargo ship) went down to $50 million from around $150 million. Similarly, freight rates came down substantially and Baltic Dry Index (reported around the world as a proxy for dry bulk shipping stocks as well as a general shipping market bellwether) which was at an all-time high at 10,500 points in July 2008, dropped below 1,000 points in a matter of days and has not recovered even after 12 years; nowadays it hovers around 600 points (433 points on May 12).