Major marine insurance body says ‘unlikely’ shipowners will risk Black Sea trade

A major industry group representing marine insurance providers has said it is “unlikely” that its members would be prepared to risk insuring vessels to transit the Black Sea, after Russia exited the Black Sea grain corridor deal earlier this week.

Approached by Agricensus for comment, a spokesperson at the International Union of Marine Insurance (IUMI) said that the final decision would ultimately rest with individual insurance companies but acknowledged that the Russian decision was concerning.

“Now that the Russian authorities have declared that any vessel sailing to Ukrainian ports will be treated as a military threat, it is unlikely that underwriters will want to cover that risk,” an emailed statement from the IUMI representative said.

“Similarly, it is unlikely that owners/charterers will be willing to put their vessels and crew in danger,” the statement said.

Russia pulled out of the Black Sea grain corridor agreement earlier in the week, and then issued a statement via its defense ministry that said all ships heading towards Ukrainian ports would be considered aiding the Ukrainian war effort.

That triggered cancellations amongst shippers that had been waiting to enter the Black Sea to pick up Ukrainian agricultural exports from the ports of Pivdennyi, Odesa or Choronomorsk, as the trade accepted that transit is likely to get harder.

However, some trade sources have said they will reserve judgement for a week or so, amid hopes that Russian sabre rattling is a desperate attempt to influence international opinion in a bid to extract concessions.

An intense barrage of missile and drone strikes against Odesa over the last four nights and days is unlikely to be sustainable, and attacks against the Danube ports further south – where much of Ukraine’s export capacity is now focused – risks escalation with neighboring EU nations.

There is also hope that some of Russia’s key trade partners could also exert pressure on Moscow, with 60,000 mt of corn said to be ready for export to China, lost in a recent Russian strike on Odesa.

Alongside that, representatives of two major African buyers – Egypt and Kenya – has expressed their disappointment with Russia pulling out of the grain deal.

Ukraine has tried to fight fire with fire and has warned that it could hit back at Russian shipping deemed to be helping the Russian military.

While trade sources doubt the country has the capability – or the desire to target Russian shipping in a tit-for-tat move – the statement from Ukraine’s government has further increased the level of danger in the region.