Oil and Grain Exports Plummet as Ukraine and Russia Attack Shipping
The targeting of commercial shipping, primarily in the Black Sea, continues as both Russia and Ukraine have escalated their efforts this summer. Ukraine has mostly been focusing on the oil sector in Russia and aiming to cut off supplies to Crimea, while the Russian Ministry of Defense is targeting port infrastructure and vessels in or near Ukraine’s ports, asserting all of them are carrying military supplies and equipment for Ukraine’s armed forces.
The attacks show no sign of relenting. Russia claimed to have struck as many as five more vessels in the past two days. In reports posted online by the Ministry of Defense, it claimed to have hit three cargo ships and one tanker in the port of Pivdennyi (Yuzhny) as well as port infrastructure. Another report cited a strike on a cargo ship near Odesa. It is part of an ongoing pattern of striking the dry bulk carriers sailing to and from the Odesa regional port complex.
Last month, Ukraine reported striking well over 100 vessels, mostly the smaller tankers moving fuel to Crimea. It also continues to strike tankers in the Black Sea, including a new unconfirmed report overnight, while it was said to have agreed to stop attacks on foreign-flagged tankers after protests from the United States, Kazakhstan, and private companies.
The results, according to multiple reports, are starting to show in the exports of oil from Russia and the export of grain from Ukraine. There have been stories of growing fuel shortages in Russia as Ukraine’s strategy focuses both on the oil exports and the refineries across the country. Bloomberg reports oil exports over the prior four weeks have fallen to just under 3.5 million barrels per day.
Ukraine also appeared to be targeting Russia’s Black Sea grain exports. Last week there were reports that five bulkers near Novorossiysk were hit. The media has said that the grain terminals in Novorossiysk were closed and that Russia was only getting exports out through the smaller facility at Tuapse.
Russia’s strategy appears to focus on the grain exports, and the reports are that Ukraine’s exports may be down by as much as 60 percent in August. Ukrainian officials assert the Black Sea ports remain open and are functioning. The ports around Odesa are critical because they typically account for up to 90 percent of Ukraine’s exports.
Ukraine has attempted to ship more grain overland and by rail, but exporters point out that it can only move a fraction of the quantities typically moving through the ports. Some reports say Poland has become a new export route. Ukraine has also used the Danube and canals to reach Romania, but low water levels on the river are limiting that route. Reuters quotes analysts saying only five to seven vessels a day can move through the Sulina Channel.
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Larger quantities have been sent west to the Danube ports, but there too backlogs have formed. According to Reuters, between 50 and 70 vessels are waiting near the Danube. It points to a shortage of pilots as well as competition for space at the terminals. Ukraine also moves fuel and other supplies through these ports.
There is no sign of relief. Turkey attempted to mediate a ceasefire to protect international crews, but the reports were that it did not proceed. Now Ukraine’s president Volodymyr Zelensky says Russia rejected a proposal that would have stopped the targeting of shipping.
