The increasing Ukrainian attacks on Novorossiysk - the largest Russian port on the Black Sea - have caused disruptions in oil and grain supplies in recent weeks. Moscow's naval forces no longer dominate the region. Exporting goods through the Black Sea is becoming increasingly difficult for Russia, and logistics can only be partially reorganized. If the attacks continue, the consequences for Russia's exports and, accordingly, for the state budget could be very serious, experts DW spoke to believe.
What is the significance of Novorossiysk
In terms of volume of cargo handled, Novorossiysk is the largest port in Russia and one of the largest in Europe. It has been a key center for Russia's foreign trade since the 19th century. Today, up to a third of Russia's grain exports are processed through Novorossiysk, thanks to the port's easy access to the country's main agricultural regions. It also exports crude oil, metals and other cargo to world markets.
Recent Ukrainian drone attacks have created serious problems for the port and for exports - especially grain. Andrei Sysov, head of the agricultural research consultancy SovEcon, said that on August 12, the grain terminal and bread-processing plant in Novorossiysk - one of the largest grain and export port complexes in Russia - stopped operating. A day later, the same happened with the KSK terminal - the largest deep-sea grain terminal. The terminal in Taman had already stopped operating in late July. Ukraine had previously paralyzed the shallow ports in the Sea of Azov. Only Tuapse, the smallest of the deep-sea terminals, continues to operate. "This means that practically all Russian grain exports through the Azov-Black Sea basin are blocked," Sysov noted.
The situation with oil exports is not so dramatic. They are often interrupted, but have not stopped completely. According to "Reuters", the largest point for transferring Russian crude oil and oil products in the Black Sea, the Sheskharis terminal, was supposed to stop working for two days in the middle of the month.
Implications for the grain market
According to London-based Argus Media – one of the leading independent agencies for researching prices for energy, raw materials and transport on world markets, Russia could supply about 45 million tons of wheat to the world market in 2026/27. Thus, wheat would be the main component of its agricultural exports. However, the ongoing blockade in the Black Sea makes this impossible. Usually about 90 percent of shipments are processed through this region.
Andrey Sysov believes that "many Russian producers will not survive this season, especially after several years of deteriorating financial conditions”. Since exports are no longer possible, surpluses of grain must be sold on the domestic market, which leads to a decrease in prices. Even if exports recover over time, problems remain inevitable. August marks the peak of the season, and what is not delivered now will be difficult to deliver later, as terminals are already operating at full capacity in the autumn months.
Russia is the world's largest wheat exporter. Moscow's export problems will also have an impact on global grain markets, especially given that exports from Ukraine, another major supplier, have also been significantly reduced. Both countries are currently attacking their export opportunities. "Due to logistical difficulties, the otherwise abundant wheat harvests in Ukraine and Russia have been cut off from the world market. Both countries are trying to use alternative routes, such as Baltic Sea ports or terminals on the Danube River. "However, they cannot completely replace traditional routes," Xiaoyi Deng of Argus Media told DW.
What will happen to oil exports from Russia
In the first two weeks of August, the port of Novorossiysk processed 30 percent less oil than in the same period last year, according to data from the Center for Research on Energy and Clean Air (CREA). The drop in supplies came after a drone attack on the Caspian Pipeline Consortium terminal on July 19.
Isaac Levy, an energy analyst at CREA, points out that supplies could decline not only because of infrastructure damage. Some shipping companies are simply refusing to dock in ports considered potential targets for drone attacks. Safe passage through the Black Sea is not guaranteed for anyone. According to "Bloomberg", a Greek tanker suspected of carrying Russian oil was attacked on August 17. "If the current restrictions continue until the end of August, it will become increasingly difficult for Russia to simply postpone deliveries in the hope of compensating for losses later," Levy says. "While the lost volumes can be rerouted, this is only possible to a limited extent. The most realistic options are the Baltic ports of Primorsk and Ust-Luga. However, this will increase transportation costs. Novorossiysk cannot be completely replaced.”
As with grain exports, the consequences will depend on the duration and intensity of the drone attacks, as well as on Russia's ability to quickly repair the damage, explains Levy. But the Russian authorities are clearly willing to take risks. Let us recall that Ukraine's proposal for a ceasefire in the Black Sea, which became public on August 13, was rejected by the Kremlin.
Author: Oleg Loginov