Escalation in the Black Sea

Ukraine warned on Thursday that it would consider any incoming ship traveling to Russian ports and Ukrainian ports in the Black Sea occupied by Moscow as laden with weapons, responding in kind to a threat issued by Russia a day earlier.

Moscow on Wednesday said that any ships traveling to Ukraine’s Black Sea ports would be seen as possibly carrying military cargo. Ukrainian Defense Ministry said it could repel Russian aggression at sea.

The escalation in the Black Sea jolted world grain markets after Russia pulled out of a wartime deal that allowed Ukraine to send agricultural products to countries in need safely. The United Nations said the end of the deal would result in more human suffering, potentially affecting millions of people.

Since quitting the deal, Moscow has rained missiles down nightly on Ukraine’s two biggest port cities, Odessa and Mykolaiv. Thursday’s strikes appeared to be the worst yet.

Targeting Grain Supplies and Infrastructure

Ukraine accused Russia of targeting grain supplies and infrastructure vital to the Black Sea Grain Initiative, which was brokered by the United Nations and Türkiye a year ago to alleviate a food crisis worsened by Moscow’s invasion of its neighbor.

“The fate of the cruiser ‘Moskva’ proves that the Defense Forces of Ukraine have the necessary means to repel Russian aggression at sea,” the Ukrainian Defense Ministry said, referring to the flagship of Russia’s Black Sea Fleet, which was sunk last year.

“Ukraine’s Ministry of Defense warns that from 00:00 on July 21, 2023 (2100 GMT on Thursday), all vessels heading in Black Sea waters in the direction of the Russian Federation’s seaports and Ukrainian seaports on Ukrainian territory temporarily occupied by Russia may be considered by Ukraine as carrying military cargo with all the relevant risks.”

Ukrainian officials want to continue the Black Sea grain shipments and are trying to establish a temporary route. Kyiv has called on the U.N. and neighboring countries, including Türkiye, to secure safe passage for cargo through joint patrols.

Impact on Trade and Prices

But no ships have sailed from its ports since Moscow pulled out of the deal, and insurers have had doubts about whether to underwrite policies for trade in a war zone.

The Ukrainian Defense Ministry also said that navigation in the northeastern part of the Black Sea and the Kerch-Yenikal Strait of Ukraine was banned as dangerous from 05:00 a.m. (0200 GMT) on July 20.

Washington called Russia’s warning to ships a signal that Moscow might attack civilian shipping. Russia’s ambassador to Washington, Anatoly Antonov, said his country was unprepared to do so.

The signal that Russia was willing to use force to reimpose its blockade on one of the world’s biggest food exporters set global prices soaring.

Moscow says it will not participate in the year-old grain deal without better terms for its own food and fertilizer sales.

International Condemnation

U.N. Secretary-General Antonio Guterres strongly condemned the Russian attacks on Ukraine’s Black Sea ports and warned the “destruction of civilian infrastructure may constitute a violation of international humanitarian law.”

“These attacks are also having an impact well beyond Ukraine,” said U.N. spokesperson Stephane Dujarric, adding higher wheat and corn prices hurt everyone, especially vulnerable people in the global south.

The grain accord enabled the export of more than 32 million tons of Ukrainian grain over the last year, relieving countries facing critical food shortages, such as Afghanistan, Sudan and Yemen.

The Black Sea escalation pushed U.S. wheat futures up on Thursday after they jumped 8.5% on Wednesday, their fastest single-day rise since the initial days of Russia’s invasion in February last year.

Major grain importers in the Middle East and North Africa have reacted calmly, however, to the end of the safe shipping corridor, European commodity traders said, and there was no panic buying.