Russia struck the area around Izmail, Ukraine’s largest Danube port, overnight Thursday, (13 Aug) damaging port infrastructure and starting a fire. The attack came barely 24 hours after Ukraine unleashed hundreds of drones, missiles and uncrewed boats against Novorossiysk, Russia’s principal Black Sea export hub and the main home of its displaced Black Sea Fleet.

Ukraine claims several Russian warships were hit in what presidentVolodymyrZelensky described as a “unique operation”. The commercial fallout was equally significant. Three major grain terminals at Novorossiysk were reported damaged, with at least two suspending operations. 

The attacks have turned what had largely been viewed as an escalating security crisis for merchant shipping into an increasingly serious global grain supply problem.  Russia is the world’s largest wheat exporter, while Ukraine remains one of the leading suppliers of wheat, corn and other agricultural commodities. Now is harvest season and their Black Sea terminals are particularly important to buyers across North Africa, the Middle East and Asia.

Russian agriculture officials are now looking to redirect cargo towards ports in the Baltic and Caspian Seas as well as overland routes following the disruption at Novorossiysk. Moscow was already struggling with reduced activity in the Black Sea and Sea of Azov before Wednesday’s attack, as Ukrainian drones increasingly targeted ships and maritime logistics.

The Russian Union of Grain Exporters and Producers has warned a 30m to 35m tonne shortfall is possible this season if disruptions to main Black Sea export corridors continue.      “Alternative routes are unlikely to offset the shortfall. Ports already have capacity constraints as we begin the peak export season, and difficulties increase with the distance of transporting cargoes away from the main southern grain-producing regions, with both Baltic and eastern ports being considered,” broker SSY noted in an update.   Ukraine faces an even more acute shipping problem. Russian attacks on commercial vessels and the Greater Odesa ports have sent Ukrainian grain shipments plunging. Agriculture ministry figures show shipments during the first 12 days of August down around 76% year-on-year, even though cumulative exports since the beginning of the new marketing year remain slightly ahead of last year thanks largely to earlier corn movements. Wheat exports so far this season are down 18%.     Ukraine is attempting to rebuild alternative logistics. Kyiv and Moldova have agreed discounted rail arrangements to move more cargo westwards, while the Danube ports have again taken on greater importance — making the latest attack on Izmail particularly significant.     And the maritime escalation may not stop at the Black Sea.     The Gazprom NeftekhimSalavat complex, one of Russia’s largest oil and petrochemical refineries, is currently on fire following a Ukrainian drone attack this morning.     Russian president Vladimir Putin warned yesterday (12 Aug) that Moscow could begin seizing merchant vessels linked to European countries if governments move ahead with seizures of Russian ships and cargoes.   Putin described Western action against Russia-linked commercial vessels as “piracy and robbery” and said Moscow would respond in kind — not necessarily in the same waters where Russian ships were detained, but “wherever” it considered appropriate. Russia’s Pacific Fleet commander subsequently told Putin that his forces were ready to inspect and detain vessels serving countries Moscow regards as unfriendly.

Sweden’s Supreme Court cleared the way last week for the cargo vessel Caffa to be transferred to Ukraine, establishing a potentially significant precedent for ships accused of trading stolen commodities from Russian-occupied territory.