Open the Black Sea for Shipping!

The greatest current threat to the Ukrainian economy is Russia’s blockage of Odesa’s three harbors, and thus Ukraine’s commodity exports. Ukraine’s economy managed the war years 2023-25 amazingly well, but it needs three factors to keep going – Western economic financing to the tune of $100 billion a year, shipping over the Black Sea, and functioning electricity. The financing is all right. The EU fell short on financing in 2022, but since then Europe has helped very much. When US President Donald Trump stopped all financing of Ukraine in January 2025, Europe stepped up and compensated for the US shortfall.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. During the last two winters, the main bottleneck has been electricity. Russia has repeatedly bombed all Ukraine’s thermal power stations, most of the big hydropower stations, and many transformers. Ukraine has been saved by its three big nuclear power stations, which Russia has not dared to bomb as yet, and admirably quick repairs by DTEK and Ukrenergo. Fortunately, Russia has not found Ukraine’s small-scale sources of electricity – i.e., wind turbines, solar panels, generators and batteries – worthwhile to bomb. By connecting with the Central European grid, Ukraine can import electricity when needed. There have also been periods of informal energy ceasefire. The current problem is Black Sea shipping Miraculously, Ukraine succeeded in defeating the mighty Russian Black Sea fleet with sea drones in 2023, allowing it to ship its commodity exports from the Odesa area from September 2023 until this July. However, the warfare has moved on to drones and ballistic missiles, allowing both Russia and Ukraine to bomb each other’s civilian shipping in the Black Sea. Other Topics of Interest Estonia Probes Possible Russian Sabotage After Fire at Defense Firm Supplying Ukraine Estonian authorities are investigating suspected arson at Milrem Robotics, including whether Russia was involved. From July 9, Ukrainian Black Sea shipping has almost ceased, hitting its exports of grain, steel, and iron ore. Ukraine’s main iron ore mines and steelworks have been forced to stopp their operations because they cannot transport their wares profitably. During the war, Ukraine’s agricultural sector has risen to about 60% of the total export revenues. Ukraine is reaping a good harvest this year of slightly more than 80 million tons of grain and oil seeds. Alas, it might not leave the country. According to Agrarian Policy and Food Minister Taras Vysotskiy, Ukraine risks losing half of its agricultural exports, at least 30 million tons, because of the Odesa port blockade. In one year, “that could amount to between $10 billion and $12 billion.” Some grain can be transported by rail, some on the Danube and a little by truck, but these means of transportation are expensive, depriving farmers of any profits. The Danube has little capacity and the current drought has reduced its navigability. In 2023, when Ukraine tried to redirect some grain exports to Europe, less efficient Polish farmers protested ferociously. Ukraine’s traditional grain markets are mainly in North Africa and the Middle East, to which the grain needs to be shipped. Conversely, Ukraine has bombed a vast number of Russian oil tankers in the Sea of Azov and around the Russian port of Novorossiysk to isolate Crimea, starve it of oil, and to reduce Russia’s oil exports and thus revenues. The Financial Times (FT) has reported that US vice president JD Vance called President Zelensky on July 31 and asked him to halt Ukrainian strikes on tankers using the Novorossiysk port. Some of the oil exported through that port comes from Kazakhstan and is co-owned by Chevron and Exxon. They also co-own the Caspian Pipeline Consortium, which transports the oil from Kazakhstan to Novorossiysk. According to the FT, Ukraine agreed not to target CPC infrastructure or non-Russian vessels as long as those ships were not under Ukrainian sanctions and were not carrying Russian oil. Yet, Ukraine does not appear to have received anything in return. The United States could have pressed Russia to stop bombing of Ukrainian shipping and establish a ceasefire for shipping on the Black Sea, but the Trump administration does not appear to have any such ambition. Instead, Turkey took such an initiative. On Aug. 8, Turkish Foreign Minister Hakan Fidan called on both Russia and Ukraine to establish a mechanism for a Black Sea ceasefire, as the Black Sea Grain initiative brokered by Turkey and the United Nations that existed for grain shipping in 2022-23. Ukraine agreed and proposed a mutual halt to strikes on civilian targets in the Black Sea as well, passing on the proposal to Moscow through an intermediary. Russia waited for a few days with its response, but it delivered a complete rejection: The Russian Foreign Ministry spokeswoman Maria Zakaharova stated: “We view these attacks as a deliberate policy aimed at destabilizing civilian shipping in the Black Sea region, to escalate tensions further and prolong the conflict…” She ruled out returning to the Black Sea Grain initiative of 2022-23. Her boss, Russian Foreign Minister Sergey Lavrov, went further. He broadened the Russian rejection to the possibility of freezing the current front line, signaling Moscow’s intention to continue military operations despite Ukraine’s recent diplomatic overtures. This is a serious escalation. Russia is going in for the kill. It sacrifices ever more soldiers, whereas Ukraine bombs its oil refineries and warehouses. Both countries have essentially stopped the other country’s Black Sea shipping, but that causes greater relative harm to Ukraine, which has no alternative shipping outlet. Russia actually ships more through its Baltic harbors, and it has diverted a lot of oil to its St. Petersburg ports. Something has to be done. The ideal short-term solution appears to be a Black Sea shipping ceasefire as in 2022-23. Russia opposes it, but Turkey and the European Union should push hard for it and not give up. The Crimean War of 1853-56 spread to the Baltic Sea. The same is happening now. Russia is moving its oil and shadow fleet from the Black Sea to the Baltic Sea, and the EU is responding with more sanctions. They must be made effective. The very pro-Ukrainian countries around the Baltic Sea need to stand up and deliver. The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post. Anders Aslund Anders Åslund is a senior fellow at the Stockholm Free World Forum and Adjunct Professor Georgetown University. A leading specialist on the East European economies, he has authored 15 books, most recently Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy. He has advised the Russian and Ukrainian governments and earned his D.Phil. from Oxford University.