Istanbul. The Black Sea is one of the most important export and import routes for Russia and Ukraine. But for shipping companies, the sea is now a high-risk zone - at least as dangerous as the Strait of Hormuz.
According to the International Maritime Organization, there have been at least 85 Iranian attacks in the strait between Iran and Oman since the war there began in late February, leaving 24 sailors dead. In the Black Sea, the Turkish Seafarers' Association Deniz Iscileri counted 246 attacks in July alone, in which 21 sailors fell victim.
Shortly after the attack on Ukraine began at the end of February 2022, Russia attacked Ukrainian ports and ships. But this year Moscow has intensified the attacks - and Ukraine is hitting back massively. The three major Ukrainian ports of Pivdenne, Odessa and Chornomorsk, which lie next to each other, have been under constant Russian fire this summer.
Moscow also attacked the port of Mykolaiv, which is important for the export of grain, vegetable oils, metals and fertilizers, as well as ships loaded with Ukrainian goods with missiles and drones. Ukraine, for its part, hit ports on the Sea of Azov - located northeast of the Black Sea between southern Ukraine and Russia - as well as the two Black Sea ports of Novorossiysk and Tuapse with the heaviest drone fire since the start of the war.
In July, the Russian authorities had to stop operations at the ports on the Sea of Azov, and the port of Novorossiysk can only be used to a limited extent. Like the Russian troops, their Ukrainian opponents also attacked ships. According to Deniz Iscileri, 388 ships have been attacked in the Black Sea in the past four and a half years, including 318 this year alone.
The “Joint War Committee” (JWC), a London-based association of leading insurance companies that identifies sea areas with an increased risk of war and terrorism, has now declared almost the entire Black Sea a high-risk area. The JWC announced in mid-September that the only exceptions to this were the coastal areas of the neighboring states in addition to Russia and Ukraine.
“Merchant ships, anchorages, port entrances and the entire maritime logistics chain are now exposed to the danger of drones, missiles, mines and possible collateral damage,” says shipowner Mustafa Can. Insurance premiums have increased, crews are more difficult to find, charterers have to expect additional costs, and the entire planning process has become more complicated. “As a result, shipping companies are now much more cautious about accepting voyages to the Black Sea.”
If ships were stranded without orders, a fleet of 150 ships could incur losses of up to $450,000 per day, Can calculates. But the losses went far beyond that. “Turkish ports, shipping agencies, suppliers, ship chandlers, repair yards, tugboat operators, freight forwarders and other maritime service providers are all dependent on shipping traffic in the Black Sea,” said the chairman of Transbosphor Maritime.
The war in the Black Sea threatens food security in many countries around the world. German Foreign Minister Johann Wadephul (CDU) also pointed this out after meeting his Russian colleague Sergei Lavrov in New York. Wadephul said on ARD that he was committed to a ceasefire in the Black Sea. A number of colleagues from the global south had asked him to do this. “There is a threat of famine,” he warned.
According to surveys by the Deniz Iscileri Seafarers' Association, the Russian attacks were almost exclusively directed against cargo ships, largely bringing Ukrainian grain exports to a standstill. The largest buyers in terms of trade volume are Egypt, Algeria and Indonesia for wheat, Turkey, Italy and Spain for corn and China for barley. However, poorer countries are particularly vulnerable because they can hardly turn to other suppliers - for them, even short interruptions in deliveries become sensitive in terms of food policy.
The Ukrainian attacks, on the other hand, were primarily directed against the tankers of the Russian shadow fleet. “We can observe that Russian ships anchored in Istanbul are increasingly shying away from sailing through the Black Sea,” says Yörük Isik from the consulting firm Bosphorus Observer. “When they do, they immediately turn off their AIS devices and use sophisticated deception tactics to get home.”
About a quarter of Ukrainian attacks hit cargo ships, which in turn hampered Russia's grain exports. Russia and Ukraine are among the largest grain exporters in the world. The two countries typically account for more than a quarter of global wheat exports. The most important export route is the Black Sea.
After Russian attacks on ships and port facilities, Ukraine's grain and vegetable oil exports fell by more than half in August, the chief economist at the European Bank for Reconstruction and Development, Beata Javorcik, recently told Handelsblatt. For Russia, Sovecon, which specializes in the agricultural markets on the Black Sea, expects wheat exports to fall by 56 percent in September.
The bottlenecks in the Black Sea region have led to an increase in world market prices. On the world's leading commodities exchange in Chicago, the price of wheat has risen by almost 39 percent this year.
The Middle East is one of the regions most dependent on grain imports. In the first half of the year, Egypt sourced more than 82 percent of its wheat from Russia and Ukraine, with Russia alone accounting for 57.5 percent. Jordan, Algeria and Tunisia get more than half of their wheat from these two countries.
In Egypt, the world's largest wheat importer, it is mainly small bakeries that are suffering, as they have to adhere to government-set bread prices despite the increased costs of flour and energy.
Since it rained a lot this year for the first time in a long time, the harvests in many countries in the Middle East were better than in previous years. However, they were unable to compensate for the reduced imports. Many governments are therefore trying to diversify their sources of supply. Egypt has concluded treaties with France, Bulgaria and Romania. However, European wheat is usually more expensive than Russian wheat.
The Gulf states, which are also heavily dependent on grain imports, had to switch to routes other than the Strait of Hormuz due to the Iran war, which entails higher transport costs. Saudi Arabia imported a quarter of its barley, used for animal feed, from Russia and Ukraine in the first half of the year. The world's second largest importer of barley has now switched to suppliers in Argentina and the European Union.
Turkey is also one of the largest importing countries of Russian and Ukrainian grain. In the first seven months, Turkey imported grain worth almost $1.8 billion from Russia and almost $1.3 billion from Ukraine. After the government lifted import restrictions, imports from Russia increased by more than 50 percent.
While Turkey can supply the domestic market with a large proportion of its domestic wheat, a large proportion of the imported wheat is processed for export. Among other things, it is used to make flour, pasta and biscuits, which are then sold primarily to the Middle East and Africa. The country occupies a leading position worldwide in this sector.
Both Ukraine and Russia are trying to export grain through alternative routes. But these cannot replace the route across the Black Sea.
Since fewer and fewer large shipping companies are willing to call at Ukrainian or Russian ports, freight rates are rising, says shipowner Can. This attracts shipowners who take higher risks. According to the observation of the ship tracker Isik, these are mainly smaller shipping companies from Turkey and Russia.
The willingness to take risks also depends on how old a ship is, says Can. Owners of ships worth three to five million dollars would have completely different financial flexibility than owners of ships worth thirty to fifty million dollars.
