Russian forces have attacked several Ukrainian port infrastructures in the south and threatened ships that would reach these shores. For the first time, Moscow also hit a port on the Danube, an almost exclusive outlet for grain.
Moscow is targeting Ukrainian grain exports, after its withdrawal from the agreement establishing a secure corridor in the Black Sea. For more than four hours, Monday July 24, drones pounded a Ukrainian port located on the Danube. A first since the start of the war, when the great river established itself as one of the main routes for the flow of Ukrainian grain. This attack confirms the Kremlin’s desire to materially harm Ukrainian trade outlets.
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In the port of Reni, three grain warehouses were destroyed by Shahed-136 drones, said Ihor Plekhov, head of the local administration. Buildings of the Maersk company were also affected. The target is located a few hundred meters from the border with Romania, a member country of the European Union and NATO. “That’s probably why they didn’t use missiles, which are less accurate.”, comments Andrey Sizov, an analyst for the think tank SoveCon, which specializes in agricultural markets in the Black Sea. The latter does not hide his “surprise” after this operation.
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In Izmail, another Ukrainian river port located further east, a grain shed was also destroyed, and seven people were injured. Romanian President Klaus Iohannis has “strongly condemned” these attacks: “This recent escalation affects the transit of Ukrainian grain and therefore global food security.”
The Danube, an essential route for Ukrainian grain
Previously neglected by Ukraine, the Danube has become the main export route for Ukrainian cereals, through a few river ports of modest size – Reni, Izmail, Kiliya and Ust-Dunaisk – whose terminals have rapidly developed with the war. Too small to absorb the entire production, they nevertheless allowed Ukraine “to ship approximately 2.5 million tonnes per month”specifies the analyst, either “40 to 50% of total exports”. Once in Romania, the cargo reaches the port of Constanta, which has already handled a third of Ukrainian exports since the start of the war. They can also reach Western Europe by rail or truck.
Since the end of the Black Sea agreement, “Reni and Izmail are a vital pipeline for the export of Ukrainian goods”, summarizes Cezar Gheorghe, specialist in agricultural markets at the Romanian firm Agricolumn. After the attack, about fifty ships anchored near the two small ports, he said. Insurance companies have already doubled their rates, he adds, and “some are waiting to see if they will even continue”.
Last week, in anticipation, some shipowners “refused to send ships to the Danube”, adds Andrey Sizov. Due to this new threat, deliveries to terminals may be limited to daytime operations. Drone attacks, in fact, are often carried out at night, in order to complicate the work of anti-aircraft defense. But reducing the window by several hours, “obviously would slow down the pace of deliveries”completes this expert.
Former ports protected by the agreement now targeted
Especially since the way to the Black Sea seems locked. The ports of Odessa, Chornomorsk and Youzhni-Pivdennyi, the three concerned by the agreement on cereals, had made it possible to sell nearly 33 million tonnes of grain. But they are again subject to the blockade of the Russian forces, who methodically target their installations. On July 18, as soon as the agreement comes to an end, “port infrastructure” Ukrainians were damaged in Odessa, according to the Ukrainian military command, as well as industrial infrastructure in Mykolaiv, further east.
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“These attacks were more or less expected after the official end of the agreementcomments Andrey Sizvov. The Kremlin, probably, wants to show this time that it is serious. So far, the markets have not believed him, because they remember that Moscow cried wolf many times.” Last October, Russia simply withdrew from the agreement for a few days, before rejoining it after the intervention of Turkish President Recep Teyyip Erdogan.
Now the attacks are almost daily. On Wednesday, the port of Odessa was again targeted and sixty thousand tons of grain were destroyed in Chornomorsk, while they “had to be shipped through the grain corridor 60 days” earlier, according to Ukrainian Agriculture Minister Mykola Solsky. “The grain infrastructure of international and Ukrainian traders and transporters has been the most affected”, he said, mentioning the facilities of the French CMA-CGM and the Canadian Viterra. It will take at least a year, he added, to “fully restore” destroyed sites.
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However, these estimates seem exaggerated in the eyes of Cezar Gheorghe, of the Romanian firm Agricolumn. Terminals “do not keep such quantities for months”, because their activity is based on transit. Ditto for repairs, which could take “three or four months”, according to him. Russian forces again struck the Odessa region in the following days, and Andrey Sizov especially emphasizes the political dimension and “symbolic” such attacks.
Tensions in European outlets
After the closure of the maritime corridor, “Investors react to increased bombing of alternative grain export routes”, adds Arthur Portier, an analyst at Agritel, to AFP. The price of common wheat, in particular, has taken 12% in recent days, on the French quotation Matif (EuroNext). Ukrainian grain, meanwhile, is being squeezed. “The ports of Odessa are blocked and a threat hangs over the Danube terminals, which still have limited export possibilities”, summarizes Andrey Sizov. A situation all the more difficult as “tensions between Ukraine and the countries of Eastern Europe have not disappeared”.
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Romania, Poland, Slovakia, Bulgaria and Hungary have indeed obtained from the European Commission a ban on the sale of Ukrainian grain on their territories until September 15, so as not to destabilize local economies. They had also benefited from 156 million euros in European aid. “Ukraine wants to ship as fast as possible”observes Cezar Gheorghe, and it is difficult for him to compete on price, not to mention the imbalances “in regulatory proceedings”. These five EU states even intend to extend the ban. A demand “unacceptable”, denounced the Ukrainian president, during a meeting held on Monday evening on this issue.
With lines of trucks of several kilometers, the Romanian port of Contanta, then, is already completely saturated. Anticipating the end of the agreement, “the Ukrainians had planned to send 27 million tonnes through Romania this season, but Romania also plans to export 20 to 22 million”, emphasizes Cezar Gheorghe. That is a total twice the operational capacities of the port. To succeed in exporting its goods, the Ukrainian cereal association proposes the creation of “green corridors” towards the ports of the Baltic countries (Klaipeda), Germany (Rostock, Hamburg), Croatia (Rijeka) and other countries, thanks to European subsidies which would compensate for transport costs.
Russia leads a total blockade of the Black Sea
Finally, Ukraine is trying one last diplomatic option. “We have (…) identified the priority steps necessary to unblock” of the grain corridor in the Black Sea, declared Volodymyr Zelensky after a meeting with Jens Stoltenberg, Secretary General of NATO. At this stage, the international community has been content to maintain a polite silence regarding possible patrols. “Even if the Black Sea route is difficult to replace, we support President Volodymyr Zelensky and Ukraine (…) to find alternative transport routes”promised German Foreign Minister Annalena Baerbock.
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Russia is indeed maintaining pressure in the Black Sea, to dissuade Ukraine from restoring trade there. Vessel Ivanovets carried out live firing of cruise missiles on Friday as part of training. Moscow has announced that ships heading for Ukrainian grain ports will be considered military targets by default, leaving them vulnerable to strikes. Identifying the flag is tricky, notes Andrey Sizov, and targeting a Turkish ship, for example, could have unfortunate consequences. Without completely ruling out hypothetical targeted strikes, he recalls that “from the Kremlin’s point of view, it remains easier to target the terminals”.