The Russian-Ukrainian war crisis, one of the worst in Europe's recent history, continues raging high. Now, it expands into a new domain – maritime navigation, and, therefore, Ukraine's economy.
As one of the most recent developments, Russia closed vast expanses of the Black and the Azov Sea for civilian maritime traffic, under the pretext of naval exercises, for the period between February 13 and 19.
The decision announced in the heat of Russia's large military maneuvers in Belarus effectively isolated most of the Ukrainian-controlled southern coastline, including key ports such as Odesa, Mykolaiv, Berdyansk, and Mariupol. According to Ukrainian estimates, this consistently entails trade losses worth millions of dollars, which triggers accusations of economic warfare waged by Russia and even a sea blockade that might be imposed amid the crisis.
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Ukrainian media brought the order to the light on February 9, following announcements regarding Russian naval exercises that are expected to involve over 140 warships and 10,000 personnel. The short-term closure of certain aquatic areas, under international maritime law, due to military maneuvers is not a rare thing in the Black Sea region, particularly due to Russia's naval activities.
But this time around, according to Ukrainian experts, it is different now. "There are no passages available for commercial vessels," says Black Sea navigation expert Andriy Klymenko.
"This is something that has not happened over the last 8 years." The restricted region in the Black and the Azov seas expands up to the very border of Ukraine's 12-mile territorial waters zone, according to Russian coordinates. The initial announcement affected nearly 800 kilometers of Ukraine's southern coastline.
As a result, the entrance to the Sea of Azov via the Russian-controlled Kerch Strait was completely closed for the whole duration of drills. "As for the Black Sea basin, navigation is only possible if a vessel drifts off recommended seaways to bypass the gunnery zones," as the Ukrainian Sea Ports Authority commented later.
"Therefore, this entails imitations in terms of the vessels' draft." Meanwhile, all 13 Ukrainian seaports located on the southern coastline, according to official figures, have processed a total of 153 million tons of cargo in 2021 alone. This corresponds to nearly 60% of Ukrainian exports and 50% of imports, according to the Kyiv School of Economy.
Upon that, the Ukrainian economy is still very dependent on international trade. According to estimates by Oleg Nivievskiy of the Kyiv School of Economy, if Russia blocks all Ukrainian ports for a month, Ukraine might be losing between $25 million and $170 million a day.
After a month of the blockade, Ukraine could end up losing up to $5.1 billion, or up to 3.3% of its 2020 GDP. After three months, losses might constitute up to 9.9% of its GDP, according to Nivievskiy. The forecasts, along with Russia's military activity near Ukraine's borders, raised fears of economic strangling as one of the Kremlin's most effective tools of rendering pressure upon Kyiv.
Oleg Solodukhov, the founder of The Charterers shipping audition company, gave an even more doom-laden forecast.
"Just the very existence of the geopolitical and military risks deteriorates the effectiveness of maritime transportation of Ukrainian exporters and importers by between $2 and $3 per ton," Solodukhov says."With the blockade being possible, the raise will get increased by at least between $5 and $7 per ton. At very rough estimates, it is reasonable to believe, judging from the Ukrainian ports' cargo load, that even now Ukraine is paying $3 million a day."
In other words, as the expert said, even the media clamor against the backdrop of Russia's naval activities in the seas costs Ukraine's maritime logistics nearly $100 million a month.
Meanwhile, the Ukrainian navy on February 10 confirmed the potential impediment of international navigation and accused Moscow of the "excessive use of international law" for the sake of its political interests. The US Embassy in Kyiv later in the day also decried the Russian action:
"Russia's economic warfare against Ukraine continues," the US mission said. "Under the pretext of military exercises, Russia restricts Ukraine's maritime sovereignty, limits freedom of navigation in the Black Sea and the Sea of Azov and impedes maritime traffic essential to Ukraine's economy."
But on Feb. 11, Ukraine's State Border Guard Service confirmed the fact that Russia had suddenly revoked the no-go zone in the Azov Sea watering east Ukraine, particularly Donbas, offering no official explanations. Two ports in the region, Mariupol and Berdyansk, in 2021 transferred a total of 8.6 million tons of cargo, including items vital for the region's steelworks industry.
Upon that, according to the Ukrainian Sea Ports Authority, the Azov navigation ended up being fully open. But there have been no changes voiced regarding the Black Sea zone.
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