The last week has seen a significant escalation of both the intensity and the theaters of engagement in the ongoing NATO-Ukraine war against Russia. Of particular importance are attacks and counter-attacks that are gravely affecting maritime shipping, with major international implications for the global physical economy.
On the Ukrainian side, Deutsche Welle reports that officials claimed that they struck 11 Russian vessels in the Sea of Azov overnight, including five tankers, five cargo vessels, and one tugboat. They further claim that they have struck 116 vessels over the past nine days. Russia has not confirmed these specific results, but they have suspended all maritime traffic for now in the Sea of Azov and along the Don-Azov canal, a 30-km dredged canal connecting the major grain-transhipment river port of Rostov-on-Don with the Sea of Azov. The Russian authorities have also halted traffic through the Kerch Strait, by which ships exit the Sea of Azov into the Black Sea and beyond, so shipments from other large grain-exporting Sea of Azov ports, like the Port of Taganrog, are likewise frozen.
The Sea of Azov-Black Sea route is a critical export corridor for Russia’s huge wheat and other grain exports, handling some 30-40% of its wheat exports and 25% of its total grain exports. Russia is hands-down the largest wheat exporter in the world (25% of the world’s total), and in many years is also the leading exporter of all grains taken together (15-20% of the world total).
Do the math. In broad terms, this means that some 10% of total world wheat exports have just ground to a halt. This is in the same order of magnitude as the share of world oil (20%) that used to pass through the Strait of Hormuz, which is now closed, also due to war. The main recipients of Russian wheat exports are countries in Africa, Asia, and the Middle East—the same as those which imported Persian Gulf oil—and they will be the ones hit hardest by this body blow.
Russia’s Agriculture Ministry stated on Tuesday that “alternative shipping routes are currently being worked out in collaboration with relevant agencies and the business community,” but nothing specific has been announced as of this writing.
Russia, for its part, responded by striking dry cargo ships in the Odessa region of Ukraine, an action in accordance with President Vladimir Putin’s remark to journalists on the sidelines of the July 13 “Everything for Victory!” forum of the National Front organization: “Our responses will be mirror responses. Wherever they may try to strike in Russian territory, we shall retaliate in mirror fashion, but several times more powerfully.” The Ukrainian ports of Yuzhny, Chernomorsk, and Odessa proper were struck. The Russian Ministry of Defense stated on July 14, according to TASS, that “Russian forces delivered overnight strikes by precision-guided weapons and unmanned aerial vehicles on Kiev-based military-industrial enterprises and port infrastructure at the Yuzhny port in the Odessa Region used by the Ukrainian army… [and] a dry cargo ship carrying military cargo was hit on the premises of a container terminal at the Yuzhny port at the time of its unloading.”
Russian Foreign Minister Sergey Lavrov, speaking after talks with his Chadian counterpart during his ongoing tour of Africa, stated that the Ukrainian actions in the Azov and Black Sea are not “even piracy anymore,” but instead constitute “pure terrorism.” He added that also “the Blue Stream gas pipeline infrastructure, the pipeline that goes to Turkey, is regularly subjected to terrorist attacks…. This is pure terrorism, which, by the way, is not confined to the Azov Sea and the Black Sea. It’s also happening on the African continent.”
Lavrov added: “We will under any circumstances continue to fulfill all our obligations to supply food to our African friends, both under commercial contracts and as part of humanitarian aid, in accordance with their wishes, as we have done and continue to do.” As for the Sahel countries, “We intend to assist the countries of the region, including by strengthening the military capabilities of their national armed forces, training military personnel and law enforcement officers. We will also continue providing humanitarian assistance.”
