Twenty-One Ships
In August, Ukraine’s Black Sea ports recorded 21 ship calls, about 90% fewer than a year earlier. A month later, on 16 September, the London insurance market’s Joint War Committee (the body that tells underwriters where war-risk premiums apply) extended its high-risk zone to almost the entire Black Sea. Only the territorial waters of non-belligerent coastal states remain outside it.
While the world tracks tanker attacks in Hormuz, a second strategic waterway has closed with much less attention. The closure runs in both directions. Ukraine has done to Russia’s grain ports roughly what Russia has done to Ukraine’s. Between them, the two countries ship about 17% of the world’s traded grain, and almost none of it is now moving by its normal route.
A Two-Way Blockade
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Russia’s campaign against Greater Odesa, which MD tracked from its first wave last winter, intensified sharply in July. On 19 July the bulk carrier *Golden Leo* was hit leaving port and sank, killing nine crew and a Ukrainian pilot. On 22 July, for the first time since Ukraine opened its own shipping corridor in 2023, no ship entered Odesa’s ports. Those ports normally handled 4–5 million tonnes of cargo a month.
Ukraine answered in kind. By mid-August all three grain terminals at Novorossiysk, Russia’s main grain port, had stopped work, and analysts at SovEcon estimated that more than 90% of Russia’s Azov–Black Sea grain export capacity was offline. Russian wheat shipments in September were about 1.0 million tonnes, against 5.7 million a year earlier. Attacks have since spread into the economic zones of Romania and Bulgaria, as MD reported this week.
Grain for Refineries
Most coverage still treats this as 2022 again: Russia blockading Ukraine, with the world’s poor as collateral damage. That frame misses what has changed. The Black Sea is now a zone where each side denies the other its exports, and the two campaigns mirror each other. Ukraine is hitting Russia’s grain terminals and refineries. Russia is hitting Ukraine’s ports, which carry the farm and metal exports that make up around 70% of Ukrainian exports. Each side is aiming at the other’s main source of hard currency.
The damage is not equal. Russia loses roughly $15bn a year in grain revenue, which is painful but secondary for an oil economy, and it has found routes around the blockade. In September a record 1.4 million tonnes of Russian wheat left via the Baltic, and Baltic ports handled 54% of Russia’s seaborne grain exports. About 400,000 tonnes of that went through ports in the EU’s own Baltic member states, while Ukrainian grain ships were being sunk off Odesa. Russia’s Caspian ports handle another 29%, mainly to Iran.
Ukraine has no equivalent. Its bypass routes (Danube barges, rail and trucks into the EU) can handle only 50–55% of seaport capacity. September grain exports fell to 1.28 million tonnes, down 45% year on year, with wheat down 55%. Farmers are selling wheat below the cost of production or holding it in storage. The National Bank of Ukraine puts the second-half export shortfall at about $2.5bn. Grain is to Ukraine what oil is to Russia, and Ukraine is losing at sea the export war it is winning against Russia’s refineries.
That asymmetry explains the most important detail in the whole story. According to CFR’s reporting, Moscow has tied any Black Sea truce to Ukraine halting its strikes on Russian energy assets. Grain has become the currency of the energy war. Kyiv’s refinery campaign, which Washington now wants stopped to bring down diesel prices, is also the thing Kyiv would have to give up to reopen its ports. The pressure on Kyiv’s best weapon comes from two directions.
Europe is carrying more of the cost than it realises. The FAO cereal price index rose 17.2% year on year in September, with wheat pushed up by “Black Sea logistics problems”. Because Europe is now the main replacement supplier for buyers who used to take Black Sea wheat, the price risk sits in Paris rather than Chicago: the premium of Euronext wheat over Chicago futures almost tripled in one week in late September. Europe also depends directly on Ukraine. Ukraine is the EU’s largest corn supplier and provides 92% of its sunflower oil imports. And Ukraine’s rail bypass now runs through the EU’s most sensitive farm politics. Western border crossings carried 83% of Ukraine’s rail grain exports in September, and Warsaw is reviewing rules on storing Ukrainian grain in Poland in transit. That is the same issue that led Polish farmers to blockade the border in 2023–24.
The strongest objection is that the world has coped before. Global grain stocks are larger than in 2022, wheat prices are well below their 2022 peak, and trade flows reroute. But the larger buffer is partly an illusion. Much of it sits in Russian and Ukrainian silos behind closed ports. And rerouting is about to get harder. Ukraine’s corn and oilseed harvest is now competing with wheat for the same railcars, barges and Danube terminals. The market has absorbed the first wave of disruption. It has not yet faced a full winter of it.
Three Ways the Winter Goes
Base case: denial continues through winter (about 55%). Neither side’s ports reopen. Ukraine’s bypass capacity grows slowly toward the 3 million tonnes a month its grain traders’ association expects by year-end, still well below pre-war sea volumes. Russia keeps shifting to the Baltic. Euronext wheat holds above €240 a tonne, grain stocks build up inside Ukraine, and Ukrainian farmers cut their spring planting. The key assumption is that Odesa gets no significant new air defences, since Patriot interceptors are scarce worldwide.
Downside case: the bypass is hit (about 25%). Russia extends its strikes to the Danube terminals at Izmail and Reni, or attacks begin in Romanian territorial waters, and Poland tightens transit rules after renewed farmer protests. Ukrainian grain exports fall below 1 million tonnes a month. Kyiv would need emergency EU budget support, and European food inflation would pick up again. Few readers are pricing this in, because the Danube route has held since 2023.
Alternative case: a grain-for-refineries truce (about 20%). Turkey, which controls the straits and has brokered grain deals before, packages a mutual halt on strikes against ports into the US push for an energy truce. Russia’s terminals reopen in exchange for Ukraine pausing refinery strikes, and Odesa reopens with them. Trapped Ukrainian and Russian stocks would come onto the market at once, and wheat prices could fall sharply. Kyiv would regain its export revenue, but only by giving up the one weapon that has measurably hurt Russia’s economy.
Probabilities reflect the author’s analytical judgment based on currently available information and are not statistical forecasts.
Wheat Is Now Traded for Refineries
The Black Sea has not been blockaded by one side. Both sides have closed it, and the terms for reopening it are being written in the language of the energy war. Ukraine is losing the export fight at sea, Russia has found a back door through the Baltic, and Europe is quietly absorbing the price risk, the farm-politics fallout and the bill for Ukraine’s budget gap.
The signal to watch is Ukraine’s October grain export figure, which the agriculture ministry publishes in early November. Above 2 million tonnes would mean the bypass routes are scaling and Kyiv can wait. Below 1.5 million would mean pressure on Kyiv to accept a grain-for-refineries deal will rise sharply through the winter. Hormuz decides what Europe pays for fuel. The Black Sea will decide what it pays for bread.
