Magdy Sadek write : Black Sea – There is the rub!
By: Magdy Sadek
The Black Sea region has become an area of ignition and a High-risk region according to identified world Insurance companies. Are no longer able to cover insurance payments for ships bound for the northwestern Black Sea and Ukrainian ports in the Sea of Azov. Also,
Short sea shipping connections have changed drastically in Europe Merchant ship traffic has dropped very drastically in Black Sea ports. The Government continues to take measures to ensure the stable operation of new logistics routes IPCSA reported about the Ministry of Infrastructure of Ukraine,
At the same time, coverage continues to be provided for Ukrainian seaports in the Danube region only three Ukrainian seaports: Reni, Izmail, Ust-Dunaisk.
And therefore A large drop in the supply of cargo in Russian seaports in the Black Sea and in St Petersburg ( – 12%) was observed in March this year. In the second quarter of this year. Changes in short sea shipping will continue in all markets. BBC reported the situation will worsen in the second half of this year. Prices for grain, oil and gas, fertilizers, and steel will increase further. Freight and bunker fuel prices will be high.
The Black Sea has been of geopolitical importance to Russia through the ages and its strategic bastion in Crimea.
Although Crimea and the southern Russian port city of Novorossiysk provide the Russian navy and tankers with access to warm water ports, all ships entering or leaving the Black Sea must pass through the Turkish-controlled straits of the Bosphorus and the Dardanelles, two strategically important passageways between the Black and Mediterranean Seas Closed due to sanctions against Russia in the face of Russian ships
Ankara’s control over the Bosporus and Dardanelles has been confirmed in the 1936 Montreaux Convention in spite of The Black Sea being an important trade and transportation artery for Russia. Russia is investing in new infrastructure to protect its Black Sea trade corridor and to create more alternative routes to skirt Ukraine’s series of oil and gas pipelines including the newly launched TurkStream pipeline
Russian aggression in the Black Sea region has also caused other former Eurasian states to question Russia’s reliability and intentions
The Black Sea region has become an area of particular interest to the European Union (EU) not only due to the accession of Bulgaria and Romania but also because it is a transit area for oil and gas resources from Russia and the Caspian Sea.
Ukraine’s net trade balance also reduced in 2020, by about $6.3bn (Hrv190.41bn), as the decline in its imports
outstripped that of its exports. Ukraine imported $53.7bn worth of goods and exported $49.2bn.
Wartime Logistics
Although Ukraine was only the 46th-largest exporter globally in 2020 after the Invasion of Russia Ukraine EU and USA imposed sanctions on Russia only partially stopping traffic to Russian ports in the Baltic Sea and ports operating on other seas. Drifting mines in the Black Sea made sailing in these waters very risky. As we said before
Short Sea Shipping accounts for around 60.4% of total maritime freight transport to and from major EU ports. Sea transport increased by 0.6% in 2020, more than in 2019, according to a Eurostat analysis. In 2021, the market recovered in most EU and EFTA countries, and the cargo supply increased by about 3.2%, the statistical data of major ports can be inferred.
Short Sea Shipping accounts for around 60.4% of total maritime freight transport to and from major EU ports. Sea transport increased by 0.6% in 2020, more than in 2019, according to a Eurostat analysis. In 2021, the market recovered in most EU and EFTA countries, and the cargo supply increased by about 3.2%, the statistical data of major ports can be inferred.
The supply of goods transported by short sea shipping connections in the EU approached 1.7 billion tonnes in 2020. This meant a 6.6% decrease in cargo on ships and terminals compared to 2019. Shortsea operations returned to 2 billion tonnes in 2021 r. results from information from EU and EFTA port authorities.
The VLCs for a year reached $ 75,000 / day. After a truly sluggish 2021, there was only one other upward shift in freight rates last month, due to the war in Ukraine
The Aframax tanker sector “exploded above all due to shipments to Russia, rejected by many ship owners: on 11 March 2022
The Aframax Ice class from the Baltic was quoted at $ 262,000 / day, while from the Black Sea $ 173,000 / day. On the other hand, from the Mediterranean, the Caribbean, and the Arabian Gulf they quoted only 6-16,000 dollars/day.as said Italian expert broker Ennio Palmisano
There is hysteria about building these ships that only a few shipyards know how to do in Korea and Japan. According to some studies, the fleet of LNG carriers at sea today is made up of about 660 ships, and within four years it will exceed the Vlcc fleet, that is the 850 supertankers
The developments in Ukraine and the seriously deteriorated relationship between Russia and many other countries will impact throughput volumes for the rest of the year as well. Allard Castelein, CEO Port of Rotterdam Authority so he said
Today, Putin celebrates Victory Day at a time when the whole world which exposed to the biggest crisis while the world is on the edge of the abyss, and the Black Sea there is the rub!