The grain agreement in the Black Sea expired on Monday 17 July. Russia refused to renew it and thus weighs on the world balance.
Coup de theater or game of chess? Monday July 17, Russia announced to suspend its participation in the grain agreement in the Black Sea. This agreement guaranteed the transport of Ukrainian wheat through a secure corridor. In one year, 33 million tonnes of cereals and other foodstuffs passed through this route. The tension has been building for the past week. And as early as the weekend, Vladimir Putin hinted that he was not going to agree to extend the agreement. Monday’s announcement is therefore not a complete surprise.
>> War in Ukraine: what are Russia’s demands for extending the grain export agreement?
This corridor in the Black Sea is one of the cards in the Kremlin game to weigh on the balance of the world. And he will not deprive himself. Moreover, since its signature on July 22, 2022, the agreement has been extended three times. And each time, Moscow blackmailed. Russia even suspended its participation for a few days last October after a Ukrainian attack in Crimea. Exports had continued, without Moscow.
What is Russia looking for?
Russia is really trying to show its power and influence here. By exploiting the agreement, Putin takes over the reins of the story, he dictates his will, and the world is offended. It must be said that in recent weeks, the master of the Kremlin has had to take: the aborted rebellion of Prigojine and his Wagner fighters, the broken silence of senior Russian army officers on the lack of means, and the discussions at the NATO who are advancing on Sweden – Turkey, Putin’s great ally has finally lifted its veto.
There are also economic reasons. The Kremlin believes Russia still encounters obstacles to the export of its wheat and fertilizers, contrary to the obligations of the agreement. He also calls for the reinstatement of the Agricultural Bank of Russia, Rosselkhozbank, in the Swift international banking settlement system.
What consequences?
Now that the deal has expired, what are the consequences? In the immediate future, there should be few. Wheat harvests do not look bad in the northern hemisphere, we are not in a situation as tense as at the beginning of the war. On the Black Sea, if insurers continue to cover cargo ships, exports could continue, without Russia. It is the will of Volodymyr Zelensky who discussed it Monday evening with the Secretary General of the UN, Antonio Guterres. There are also land and river alternatives, via the Danube.
But, if the insurers freeze the contracts, or if the Russians attack the Ukrainian ports, the boats will not take the risk of circulating to the Bosphorus. In the medium term, this means less grain, and rising prices. While millions of people suffer from hunger in the world, some fear the worst for African countries.
Unless… Russia reconsiders its decision: it is possible if it obtains guarantees to weaken the sanctions. And Putin will have won this round.