How Russian Military Activity Threatens Maritime Trade
Russian military activity in Black Sea, a threat to shipping industry
The Ukraine Crisis and the activity of the Russian Military in Black sea posed a serious threat to maritime trade in the region. Due to several attacks on civilian cargo and according to the Montreux Convention, Turkey government decided to closed Bosphorus and Dardanelles straits to warships.
The increase of security risks for civilian ships
It has been only two weeks since Russian troops have crossed the Ukrainian border but the impact on international maritime flows can already be measured. By ordering a naval blocus on each single Ukrainian port in the Black Sea (Odessa, Pivdennyi, Mylolaiv and Chornomorsk) and in the Sea of Azov (Marioupol), Russia ensnared merchant shipping and brought turmoil in a region that appears to be one of the major sources of the world’s commodities and oil. Premium insurers have increased their fees to cover vessels sailing in the area – and some simply refuse to do so.
As a matter of fact, it seems that security cannot be guaranteed anymore for any civilian ship transiting through the Black Sea, regarding the maritime incidents reports over the last few days. No less than ten events occurred from the 24th of February, when a Moldavian ship was completely destroyed by a rocket in the Ukrainian territorial waters. A Turkish vessel got hit the same day near Odessa, as well as a Panama-flagged ship and even two Russian cargos.
On February 27th, a Russian navy missile hit a Bangladeshi vessel anchored near Oktyabrsk, killing one crewmember, while two merchant ships have been diverted by the Russian Navy – some sources report that an Estonian-owned cargo was used as a shield for amphibious activities, before the ship hit a mine off Ukraine coast. Even if it seems unlikely for civilian vessels to be targeted willfully, the risk of miscalculation increases dramatically due to the large amount of Russian military ships in the area
The impact of the Ukraine war on maritime trade
The effects of the on-going situation on global supply-chain flows are starting to be noticed all around the world with delays, detention of cargos by customs authorities and unpredictable operational impacts. As a result, most major maritime companies, such as CMA CGM or Maersk, have announced stopping shipping to Russian ports – a will to guarantee the safety of their crew and vessels, and perhaps to be part of the international sanctions targeting Russia. “The imbalance of goods, equipment and the financial flows are significantly affecting our planning of a stable and sustainable operation of our network to and from Russia”, the Danish container-shipping giant says. The withdrawal from the area has a serious impact on the global shipping industry, as the maritime freight in the area collapsed.
Turkey has a major role in managing security risks caused by such a military concentration in the area, by closing off the Bosphorus and Dardanelles strategic straits to warships from any country, whether or not they border the Black Sea. “All governments, riparian and non-riparian, were warned not to send warships across the straits”, Turkish Minister of Foreign Affairs Mevlüt Çavusoglu said.
The Montreux Convention of 1936 allows Turkey to restrict passage of warships from warring states, even though the country is not considered a belligerent in this conflict. A point that Turkish authorities highlighted: “if the warship is returning to its base in the Black Sea, the passage is not closed. We adhere to the Montreux rules”. Indeed the article 19 of the convention contains an exception for vessels away from their bases: according to the treaty, those warships may return through the passage. However, this decision limits Russia’s ability to move ships into the Black Sea from its other fleets, which could cause logistics challenges for Moscow.
