Russia Upends Shipping, Wheat Markets, Crude Oil Could Be Next

Wartime threats to commercial shipping are serious; at this point anything can happen in the Black Sea. Russia’s seaborne oil exports could be at risk too.

Russia has wasted no time ratcheting up tensions since its exit from the Black Sea Grain Initiative on July 17th. Pulling out of the grain deal and immediately threatening ships headed toward Ukrainian ports on the Black Sea is clearly part of a calculated Russian strategy to intensify pressure on Ukraine as the war continues.

Limiting Ukraine’s access to Black Sea shipping in order to choke off Ukrainian supplies of wheat, corn, barley, and sunseeds from global markets makes strategic sense from a wartime perspective. Russia wants to deny Ukraine the ability to raise foreign currency through export earnings and, perhaps more significantly, the Russians are trying to harm agricultural markets inside Ukraine by disrupting the plant-harvest-export logistics cycle that allows Ukraine to be a global powerhouse in agricultural export markets. Ukraine is the largest exporter of corn from the Black Sea, the largest exporter of sunseed products from the Black Sea, and the second largest exporter of wheat from the Black Sea.