Black Sea attacks on 43 vessels threaten global grain trade

Russian and Ukrainian strikes on Black Sea shipping have cut Ukraine's grain export capacity by a third, pushing wheat futures to their highest level in more than two years.

Russian and Ukrainian attacks on vessels and port infrastructure have cut Ukraine's monthly Black Sea grain-handling capacity by a third to 4 million tons, pushing wheat futures above $7 a bushel for the first time since late 2023.

"We're currently in a situation similar to the one we faced around 2023, when our grain corridor collapsed. It's very similar in terms of sentiment, market behavior, and the way it's all unfolding," said Serhiy Vovk, director of Ukraine's Center for Transport Strategies.

Russia has struck 43 vessels since June 20, killing at least 21 people, according to the Odesa region's prosecutor's office. Ukraine's drone forces have claimed strikes on 134 shadow-fleet ships in the Sea of Azov and 84 in the Black Sea, while a missile-and-drone barrage on Novorossiysk this week hit air-defense positions, piers and seaport infrastructure, President Volodymyr Zelensky said.

The escalation threatens to choke one of the world's most important grain corridors just as Ukraine's agricultural exports peak in September. Land and river alternatives, even at full capacity, would handle less than half of the volume normally shipped through Black Sea ports, Agriculture Minister Taras Vysotskyi said.

Grain exports bear the brunt

Ukraine ships more than 90 percent of its agricultural commodity exports through ports in the Odesa region, where traffic at Odesa, Chornomorsk and Pivdennyi has largely halted since mid-July. The agriculture ministry has cut its grain export forecast for the 2026-27 season to 38-40 million tons from 43 million tons, a reduction of up to 5 million tons.

Danish shipper Maersk suspended its feeder service through Chornomorsk, rerouting cargo to Romania's Constanta port, while Kernel, a leading sunflower oil and grain exporter, halted operations there. Ukraine and Moldova are in talks to ship grain by rail through Moldovan territory to Constanta, a route Kyiv estimates could handle 10 percent of its exports, though Kyiv is seeking a 50 percent discount on transport costs.

Countries dependent on Black Sea grain, including Egypt, could be forced to turn to more distant suppliers in the Americas, Asia and Australia, adding to transport costs. Wheat futures in Chicago rose above $7 a bushel in July for the first time since late 2023 as the bombardments combined with heat in prime wheat-growing regions.

Oil corridor crimped at both ends

Ukraine's drone campaign has also hit Russia's energy export routes. Black Sea drone attacks took out as much as a fifth of Caspian Pipeline Consortium loadings in July, crimping operations at the terminal that carries almost 2 percent of the world's oil, much of it from Kazakhstan. Kazakhstan's oil production fell 14 percent in July from June, and shareholders include Chevron and Exxon Mobil.

The Trump administration, worried about energy price spikes, has urged Ukraine to curb attacks on non-Russian ships. Ukraine agreed not to target CPC infrastructure or non-Russian vessels as long as they were not under Ukrainian sanctions and were not carrying Russian oil, the Financial Times reported, citing Ukrainian officials.

Türkiye seeks a moratorium

Turkish-linked vessels have been caught in the crossfire. The Turkish-managed Golden Leo sank after a Russian missile strike killed 10 people, and the Turkish-flagged Reyhan Sarı lost a crew member to a drone attack. Foreign Minister Hakan Fidan called for a moratorium on attacks, saying "the conflict has spread across the whole Black Sea."

The last time Russia targeted grain shipments in 2023, Ukraine fell back to Danube ports, which can meet only up to a third of its needs at significantly higher shipping costs. "There are certain normative restraints that would have held three years ago and no longer do," said Sidharth Kaushal, senior research fellow at the Royal United Services Institute. "You only need to hit so many ships, as we've seen in the Strait of Hormuz, before nobody will sail through."

If attacks continue into autumn, when new-crop shipments gather pace, global food prices could rise further, deepening food insecurity in African and Middle Eastern importers. The United Nations World Food Programme warned that Ukrainian grain shipments could be further disrupted, and the UN called for efforts to prevent tensions from escalating.

This article is for informational purposes only and does not constitute investment advice.