The situation with commercial shipping in the Black Sea has a chance to escalate sharply in the near future. After Russia withdrew from the “grain deal” (Black Sea Grain Initiative) on 17 July, it seems everyone is now ready to raise rates.
The Russian Ministry of Defense has warned that ships bound for Ukrainian ports may appear to be carrying weapons. This means that they can be stopped and searched (sometimes the press erroneously writes that Moscow has declared such ships “military targets”, but this is not exactly the case). By the way, such actions are not violations of international maritime law.
In response, Ukraine tried, among other things, to attack the port facilities of Novorossiysk, which today is the most important export point of Russian and Kazakh oil (through the terminal of the Caspian Pipeline Consortium). A Russian tanker was also attacked by drones (and such an attack is already a violation of international maritime law), and Kiev has declared the waters around Russia’s Black Sea ports a “military danger zone”.
Moscow’s next step was to stop and then refuse further passage through the Kerch Strait (to the Ukrainian port) of one of the merchant ships on which there were traces of explosives that may have been carried on board during the inspection. To Ukraine Last week, the Russian army intercepted the Palau-flagged Sukra Okan, owned by a Turkish shipping company, near Turkish waters. The ship underwent a cursory inspection and crossed into the Ukrainian port of Izmail at the mouth of the Danube.
The actions of the Russian army were primarily of the nature of an information-psychological operation, which showed that without Russian assistance the export of Ukrainian grain through the Black Sea would be difficult. And in any case, Ukraine should not expect to be able to procure weapons in this way.
It is noteworthy that the inspection was carried out a day after Kiev began registering merchant ships, which would express Ukraine’s desire to continue transporting agriculture and other goods along the unilaterally declared humanitarian corridor. It passes mainly through the territorial waters of NATO countries (Romania, Bulgaria, Turkey), with minimal entry into Ukrainian waters.
Ukraine, together with its allies, including the United States and Turkey (it is an ally because it is a NATO country), is developing alternative routes for grain and food exports. Outside of the grain agreement and without the participation of Russia. The capacity of ports on the Danube and the Baltic will be increased. Grain exports from Ukraine via Polish ports doubled in June compared to the beginning of the year. Negotiations are ongoing with Lithuania on the transfer of phytosanitary control from Poland to Lithuanian ports to speed up the transition. In June, more than 65% of Ukrainian grain exports passed through the so-called “Danube Corridor”, including those from the Ukrainian ports of Reni and Izmail, as well as from the ports of Moldova and Romania. “Green corridors” are planned to be organized over Hamburg and Rostock in Germany, Rotterdam in the Netherlands, Rijeka in Croatia, Trieste in Italy and Koper in Slovenia. Bucharest announced its readiness to double the transit capacity of the port in Constanta to 4 million tons per month; this roughly corresponds to the average monthly export volume from Ukraine’s Black Sea ports at the time of the grain deal (but then about 40% of exports went by other routes). All five ports in the three Baltic countries have a grain transfer capacity of 25 million tons.
The problem is that the cost of transit through Europe is $30-45 more per ton than through the Black Sea. But here the hopes of the allies for the bottomless treasury of Brussels are asking him for a subsidy. The Danube is also more expensive and more difficult: large-capacity vessels with large drafts do not pass there, only small ones, all this incurs additional costs. But it seems that Ukraine and its allies are ready to “act on the principles”, for which no money is a pity. It is important that Ukraine has shown that grain exports (including for political PR purposes) can work without Russia, including via the Black Sea.
But it is also important for Moscow to show that it will at least be more complex along previous Black Sea routes. At the same time, the Russian military is backing up actions such as new attacks directly on port infrastructure. There have already been such attacks on the port infrastructure of Odessa, Izmail and another Danube port of Ukraine – Reni.
Immediately after the collapse of the grain agreement, Kiev tried to probe the ground for the possibility of military escort of merchant ships. Turkish Navy ships may be the first candidates for such a role. However, so far, Ankara has not officially expressed its desire to take such a step. Obviously, Erdogan is waiting for either the results of his meeting with Vladimir Putin (Turkish media continues to claim that this could happen in early August) or the cancellation of this meeting and then announcing the next steps. Including those related to Ukrainian food exports.
It is noteworthy that the “contact” information about the possibility of Turkish warships accompanying merchant ships is on one of the Turkish television channels. This happened literally the day after the release of the inspection of the Turkish ship (under the Palau flag) by the Russian Ministry of Defense. That’s the answer.”
In July, UN Secretariat representatives claimed they had “made progress in some of the most difficult areas” regarding the grain initiative. There are even hints that the EU may reconnect a certain “subdivision” of the Russian Agricultural Bank to the SWIFT system. But then the Ukrainian Armed Forces struck the Crimean bridge and Moscow withdrew from the agreement. And now the EU no longer shows any willingness to meet Moscow’s demands for easing sanctions on freight (food and fertilizer) and payments for agricultural exports. The position of the Europeans seems even tougher than Washington, which is supposedly promising something. But to put it simply in words, Moscow has so far not taken any real concessions from its demands within the framework of the Black Sea Grain Initiative. Instead, the US State Department “strongly” encouraged Russia to return to the grain deal.
Obviously, the information pressure will increase, Moscow will be accused of “inciting the world to hunger”, which shows this photo of the destroyed port facilities with burnt grain. There will also be increasing resistance to Russian theses that they are ready to replace Ukraine’s supply via the Black Sea with its own supply, until some kind of sanction is already in the agricultural sector – and I don’t care if it will lead to disaster. even greater increase in world food prices. It’s about “principles”.
For example, US bank JPMorgan cut Rosselkhozbank’s service delivery connection in early August. In case anyone didn’t know, the grain deal still remained in effect, with the RSHB reporting record profits for the first half of the year.
Ukraine’s export potential is also expected to decline this year. For example, in terms of supply of wheat, which is the most demanded only in developing countries, it reaches 10.5 million tons with 37.5%. But thanks to a good harvest as well as last year’s unsold balances, Russia’s exports have the potential to approach the past agricultural year’s record of more than 60 million tons. There were even plans to use the ports of Mariupol and Berdyansk for export. The Azov-Black Sea basin constitutes up to 90% of Russia’s agricultural exports by sea. In addition, more than half of agricultural exports in general and almost 70% of wheat exports are made through three ports: Novorossiysk, Kavkaz port and Rostov-on-Don.
In Russia, there is no alternative to the Black Sea route in terms of port infrastructure. Neither in the Baltic nor in the Caspian. Therefore, it makes sense for Kiev to now bet on a sharp increase in military risks for shipping in the Black Sea, both to take revenge on Moscow for the failure of the grain deal and to reduce its competitive advantage by raising it. freight and cargo insurance prices in such an environment (but for now neither Russia’s withdrawal from the grain agreement nor Ukraine’s actions have increased prices, they are already at a high level since spring last year).
At the same time – “in principle” – Ukraine will try to send ships to the Black Sea, ignoring Moscow’s threats. After July 17, the first ship left the port of Odessa along the “temporary corridor” opened by Ukraine. It was a container ship “Josef Schulte” under the flag of Hong Kong, so this is a Chinese ship. She entered the throat safely. True, before that a letter came from the Chinese Embassy in Moscow, allowing the ship to pass. So everything is not easy in the Black Sea.
Against this background, Admiral James Stavridis, the former Supreme Commander of Allied NATO Forces in Europe (adhering to hawk positions from the very beginning of the military conflict), almost foresees a naval battle between Russia and NATO in the Black Sea.
“If Russia starts hijacking ships or tries to scare them off, I think NATO will most likely respond by supporting a humanitarian corridor for shipping,” Stavridis said. It calls for the organization of escorts of merchant ships arriving and arriving from Ukrainian ports, both at sea and with the help of aviation.
Relatively recently, the historical experience of “total naval warfare” has already occurred, there is no need to go into the history of the Second World War. Particularly during the eight-year Iran-Iraq war in the 1980s, the so-called “tanker war” broke out by both warring parties when both sides attacked tankers bound for enemy ports, including those belonging to NATO countries. But that didn’t stop the oil trade, even insurance continued, it just became more expensive. NATO did not intervene at that time, despite many events (the United States-led West mainly supported Iraq at that time). Can we repeat?
The author expresses his personal opinion, which may not coincide with the editors’ position.