Ukraine threatens a naval blockade of the Russian Federation in response to the Russian blockade
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The Ministry of Defense of Ukraine issued a statement that from 00.00 on July 21, 2023, all ships sailing in the Black Sea in the direction of Russian seaports “may be considered by Ukraine as carrying military cargo, with all the associated risks.” And after the fact, from 05.00 on July 20, Ukraine prohibits navigation in the areas of the north-eastern part of the Black Sea and the Kerch-Yenikal Canal due to the danger.
These threats were published after the Russian Defense Ministry announced on July 19 that it considers ships bound for Ukrainian ports as military transports, and the area adjacent to Ukrainian ports was recognized as unsafe. This statement follows the fact that on July 17 Russia suspended its participation in the grain deal due to failure to comply with its clauses, which were supposed to facilitate the export of Russian grain and agricultural products. On July 18–20, the Russian Armed Forces carried out missile strikes on targets in Odessa.
Ukraine has very specific capabilities to implement its stated threats – it has practically no fleet and warships, little aviation, says IMEMO researcher Ilya Kramnik. But at the same time, it retains a variety of sabotage capabilities – first of all, we are talking about drones. But their successful attacks also fall on stationary objects, and it is difficult to intercept a ship at sea with them, since it must be constantly monitored, the expert continues. That is, theoretically, attacks on Russian ships can be successful for the Armed Forces of Ukraine only if they receive direct assistance from Western countries in this matter, passing information to Kyiv about the movement of ships. Now the traffic to Russian ports, for example, in the direction of Novorossiysk – Bosphorus is very intensive. Russia, according to Kramnik, should now strengthen the blockade of the Ukrainian coast so that ships and drones that pose a threat do not come out of there.
A Vedomosti source in one of the shipping companies believes that the physical threat concerns only the Sea of Azov and the northeastern part of the Black Sea north of Novorossiysk. “Cargo ships of foreign companies regularly go to the port of Novorossiysk and to the south of it. It is unlikely that Ukraine will enter into an international conflict with any of the countries in which these companies are registered. But behind the Crimean bridge, only Russian shipping companies operate,” he explains. But he is sure that the statement of the Ministry of Defense of Ukraine is addressed primarily to insurance companies: insurers no longer work with military risks at facilities in Crimea. Now insurance companies may refuse to insure military risks for ships operating in the Black and Azov Seas. “If this happens, part of the shipowners will refuse to work in the waters of the Black and Azov Seas. The rest will raise freight rates by 2 times or more. Cargo owners will have no choice but to shift the cost of transportation into the cost of the cargo,” the source says. According to him, the players who work with grain are most at risk: the capacities for its transshipment are concentrated in the Azov and the northeastern part of the Black Sea.
Mikhail Burmistrov, CEO of Infoline-analytics, believes that “quite serious” risks are associated primarily with the work of foreign shipping companies in the Black Sea. He emphasizes that until now the blows of the opposing sides have mainly been on warships and their bases, as well as on infrastructure – ports on the territory of Ukraine and the Crimean bridge. “The statement of the Ministry of Defense of Ukraine, of course, will not add calmness to shipping in the Black Sea. I would like to believe that civilian ships will not suffer during the conflict,” he said.
According to the Association of Commercial Sea Ports, in the first half of 2023, 151.2 million tons of cargo were handled through the ports of the Azov-Black Sea basin of the Russian Federation, which is 21.2% more than in the same period last year. Transshipment of dry cargo increased by 33.1% to 71.8 million tons, liquid cargo – by 12.1% to 79.4 million tons. The turnover of the largest port in the Novorossiysk basin increased by 11% to 82.9 million tons, Taman – by 4.6% to 22.3 million tons, Tuapse – by 38.5% to 12.8 million tons, the port of Kavkaz – 2.2 times to 11.3 million tons, Rostov-on-Don – by 35.7% to 8.1 million tons.
After the start of the military operation in Ukraine and the introduction of anti-Russian sanctions by the United States, Great Britain, the EU countries and their allies, the directions for the export of basic cargo from Russia to foreign markets have changed. Against this background, the ports of the Azov-Black Sea basin show a solid growth in cargo transshipment. According to Portnews, the increase in cargo transshipment in the Azov-Black Sea basin in the second quarter of 2023 amounted to 21.2%. For comparison, the growth in the Arctic and Baltic basins, which mainly focused on European markets, amounted to 2% and 7%, respectively.
“The Azov-Black Sea basin is today the main transport corridor for the Russian economy. Shipping on it concerns almost all players in the transport industry, ”says a Vedomosti source in one of the Russian shipping companies.
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