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The chances of Russia rejoining the Black Sea grain export deal have fallen in the past week.

This assessment was issued to clients of Dragonfly’s Security Intelligence & Analysis Service (SIAS) on 28 July 2023.

  • We now assess that there is only a reasonable chance that Russia rejoins the Black Sea grain export agreement in the coming weeks
  • Russia appears to be positioning itself as a primary grain exporter over Ukraine and the Black Sea export corridors
  • Russia is unlikely to launch frequent or major attacks (such as missile strikes) on civilian ships in the Black Sea

Russia seems to be trying to undermine Ukraine’s ability to export by attacking grain infrastructure, proposing Russian grain replace Ukrainian grain and threatening on 19 July to attack ships travelling to Ukraine. While Kyiv has signalled it is willing to continue exports, it is unlikely to be able to re-open its supply chain routes by force. Nor are alternative routes likely to fully compensate for the loss of Black Sea exports.

Available information suggests Russia has not attacked any civilian ships yet. But the UK and US have warned of threats to maritime traffic in the past week. NATO also on 26 July said it is stepping up surveillance of the Black Sea region. Yet even though there have been no reported attacks, Russia’s warning seems to have deterred vessels from sailing to and from Ukraine’s Black Sea ports, according to maritime traffic websites. Maritime insurers are almost certainly reluctant to cover traffic on this route now, given Russia’s threat of military action against vessels sailing to Ukrainian ports.

Potential for attacks on shipping

Russia is unlikely to launch a sustained campaign of destroying civilian vessels in the Black Sea. Frequently destroying civilian vessels would also be likely to undermine Russia’s international standing and risk retaliatory sanctions, such as bans on Russian ships in other waterways or on docking at other ports. It would probably create international momentum for Western or Turkish naval escorts for ships from Ukraine when there is little appetite for the latter.

Frequent destruction of civilian vessels would very probably incentivise Ukraine to attack economically-important ports in Russia. After Russia’s threat, Ukraine said any ship travelling to the occupied territories or a Russian port was now a legitimate target. Russia claims Ukraine attacked a naval vessel in the southern Black Sea on 25 July, though we have been unable to independently verify this claim. Ukraine has demonstrated it is intent and capable of attacking inside Russia, including in ports. It attacked the Tuapse port, north of Sochi, on 28 February.

It is however plausible that the Russian navy harasses, seizes or sabotages civilian vessels. We have not seen any evidence to support UK and US warnings in open-source monitoring. But they are credible, in our assessment. The UK and US have often forewarned of Russia’s intent since and prior to the invasion, and many of those warnings were accurate. And in our analysis, seizing or sabotaging vessels, or laying additional mines on waterways, would demonstrate that Russia is intent on following through on its threats. It would also further damage Ukraine’s maritime economy.

Outlook for Black Sea grain deal

We now assess that there is only a reasonable possibility that Russia rejoins the Black Sea agreement in the coming weeks. We had assessed this was likely, because Russia’s departure from the deal earlier in July seemingly owed to a desire to secure concessions, rather than wholesale opposition. Western countries had also signalled a willingness to offer concessions in this area, such as relaxing sanctions on the Russian Agricultural Bank.

Russia seems to have begun promoting its own agriculture as an alternative to Ukraine’s. Despite heavy sanctions, Russia remains a major exporter of grain. According to Russian media outlet Kommersant, Russia exported 60 million tonnes of grain between July 2022 and July of this year. Putin said on 24 July that Russia is ‘capable of replacing the Ukrainian grain’. Russia has also intensified attacks on agricultural facilities across Ukraine in the past week, seemingly to restrict or eradicate Ukraine’s ability to export.

We doubt that Russia has fully abandoned the Black Sea agreement yet. The government said on 21 July that it was willing to return to the agreement if demands on sanctions relief were ‘fully’ met. But Russia rejoining appears at most now a reasonable chance. Moscow seems prepared to remain outside the deal, more than in previous months when it frequently threatened to withdraw and then agreed to an extension of the agreement. This means we anticipate that only major sanctions relief would persuade Russia to rejoin the agreement – significantly more than what Western countries have so far appeared willing to offer.

Limited options for Ukraine

Ukraine has limited options to respond. It is unlikely to be able to destroy Russia’s blockade by force. Ukraine has struggled to inflict major losses on Russian naval assets in the Black Sea since Moscow moved its fleet further from the coastline in the opening months of the war. And an international escort for civilian ships seems equally unlikely, despite calls from Kyiv for it. Turkiye has signalled earlier in July it is not willing to offer naval escorts because of the risk of conflict with Russia. A senior US government official also played down the idea of the US offering a naval escort earlier this month.

Ukraine’s other option is to redirect exports through the Danube, or through to Romania’s own Black Sea ports and then onwards. It said shortly after Russia’s withdrawal from the deal that it is willing to continue exports through the Black Sea. But maritime traffic trackers seem to suggest that these routes have all but ceased. And according to international media, ports on the Danube or redirecting Black Sea exports from ports in Ukraine to ports in Romania seem unlikely to make up for the loss of Kyiv’s Black Sea ports. Russia has also started to attack infrastructure along the Danube in the past week.

Image: Bulk carrier ARGO I docks at the port of Odesa, Ukraine, on 10 April 2023. Photo by Bo Amstrup/Ritzau Scanpix/AFP via Getty Images.