Turkey Proposes Black Sea Shipping Deal to End Attacks

Turkey is urgently working to broker a new agreement to ensure safe passage for commercial shipping in the Black Sea, aiming to mitigate the ongoing disruptions to grain exports and rising prices. The Turkish Foreign Minister, Hakan Fidan, has been in touch with both Ukraine and Russia to discuss a plan to restore maritime security, according to Hellenic Shipping News.

Turkey's Diplomatic Efforts

Turkey has sent a proposal to Russia and Ukraine, inspired by the 2022 grain corridor mechanism, to end attacks on civilian ships in the Black Sea. A Turkish diplomat confirmed to AFP that the memorandum aims to address the increasing attacks on vessels in the region, which have led to at least 25 Turkish-owned vessels being hit since late June, as reported by Hellenic Shipping News. The diplomat added that the proposal is a draft text to come up with a solution to these strikes.

According to Hellenic Shipping News, Turkish President Recep Tayyip Erdogan raised the issue with Russian President Vladimir Putin during a meeting in Kyrgyzstan. The Turkish proposal seeks to create a safe passage for commercial shipping, similar to the previous grain corridor mechanism brokered by Turkey and the UN in 2022.

Escalating Attacks and Their Consequences

The attacks on shipping and port infrastructure in the Black Sea have intensified over the past months, impacting both grain exports and global grain prices. According to Hellenic Shipping News, grain prices have risen by up to 30 percent due to the disruption in trade routes. Meanwhile, Ukraine's attacks on Russian shipping and Russia's missile strikes on Ukrainian ports have forced both nations to seek alternative routes for their grain exports.

Can Atbasoglu, an international grain broker, told Hellenic Shipping News that Russia has increased exports from Baltic ports like Latvia and Lithuania, while Ukraine has turned to Romanian ports and the Danube route to circumvent the Black Sea.

Russia's Response and Adaptation

In response to the security risks in the Black Sea, Russia has begun to shift its grain exports from Black Sea ports to Baltic and Arctic ports, according to SeaNews Türkiye. Reuters reports that Russia is preparing to utilise ports in the Baltic Sea and Arctic region more extensively as alternatives to the Black Sea ports that it previously relied on heavily for grain exports.

Port operators in Russia are reorganising infrastructure to adapt to these changes. For instance, the Ultramar terminal in Ust-Luga has begun handling grain shipments since August, with plans to redirect cargoes from Demetra, a major Russian grain trading and logistics company, to this route. The Modul terminal in St. Petersburg and the Murmansk Commercial Port are also being prepared to handle grain exports.

However, the shift to these new routes comes with additional costs, including longer domestic distances and increased rail transport expenses. SeaNews Türkiye notes that Russian grain exports fell by 31% during the July-August period and industry forecasts predict that September shipments may be only half of what they were in the same month last year.

Diplomatic Talks Continue

As Turkey's proposal is under consideration, Russia continues to seek alternative export routes for its grain shipments. Kremlin spokesman Dmitry Peskov confirmed to Hellenic Shipping News that further diplomatic contacts have taken place concerning the Turkish initiative. Russia is actively working to establish these new routes while diplomatic talks continue.

International relations professor Huseyin Bagci of Ankara’s Middle East Technical University warned that Turkey cannot solve the problem alone and urged both sides to sit down and discuss a common solution.

What this Means for Operators

The ongoing conflict in the Black Sea is significantly impacting shipping operations and global grain markets. Ship operators in the region face heightened risks and increasing costs as both Russia and Ukraine scramble to find alternative routes for their grain exports. This situation underscores the need for operators to closely monitor diplomatic developments and adapt their routes and insurance coverage accordingly. The success of Turkey's proposal will be crucial in restoring stability to the region and ensuring the safe passage of commercial shipping.

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