Flash Report: Russian Strikes On Civilian Cargo Ships — Implications
Photo: Ministry of Communities, Territories and Infrastructure Development of Ukraine, August 2, 2022
Executive Summary
Over the last five weeks, Russian forces have launched six attacks on cargo vessels moored in Odesa-area ports and in the Black Sea, resulting in numerous casualties. Russian authorities have acknowledged two of these attacks, claiming that the vessels were transporting weapons from Europe. They have provided no credible evidence to support these claims.
The likely goal of the attacks is to disrupt exports from Odesa-area ports. The attacks have already caused war insurance premiums to rise for vessels transporting grain and other goods from Ukraine. Should the Russian authorities continue this tactic, the implications for the Ukrainian economy, particularly the agriculture sector, could be significant. It would increase Ukraine’s dependence on more expensive and potentially politically contentious trade routes overland and via Danube ports.
Furthermore, while global grain prices are influenced by many factors, a reduction in Ukrainian exports could contribute to higher global grain prices and/or allow Russian grain to fill the gap. Moreover, a wider escalation of fighting throughout the Black Sea that disrupts Ukrainian and Russian grain exports could have a significant impact on global grain prices.