🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Ships backed up in Black Sea lanes as Russia warning shots raise tensions

Published 08/14/2023, 11:37 AM
Updated 08/14/2023, 03:26 PM
© Reuters. FILE PHOTO: Russian Navy patrol ship Vasily Bykov sails in the Bosphorus, on its way to the Mediterranean Sea, in Istanbul, Turkey October 16, 2019. REUTERS/Yoruk Isik/File Photo

By Jonathan Saul

LONDON (Reuters) - Merchant ships remained backed up in lanes around the Black Sea on Monday as ports struggled to clear backlogs amid growing unease among insurers and shipping companies a day after a Russian warship fired warning shots at a cargo vessel.

Russia said its Vasily Bykov patrol ship on Sunday fired on the Palau-flagged Sukru Okan vessel after the ship's captain failed to respond to a request to halt for an inspection. After an inspection, the vessel continued its journey towards the Ukrainian port of Izmail along the Danube river, Russia said.

Kviv on Monday condemned what it called "provocative" Russian actions and called for decisive countermeasures by the international community.

Insurance industry sources said rates for additional war risk premiums remained stable on Monday, although there was a possibility of a rise if a ship was damaged or sunk.

The cost of a Black Sea war risk premium, which is typically renewed every seven days and is in addition to annual insurance expenses, was estimated at tens of thousands of dollars per ship for the voyage.

At least 30 ships had dropped anchor around Musura Bay in the Black Sea, which leads into a channel that links up with Izmail further along the waterway, tracking data from analytics company MarineTraffic showed on Monday.

There were at least 20 ships anchored leading up to Izmail. In addition, there were at least 35 commercial ships waiting close to the Romanian port of Constanta, 15 more than last week, the MarineTraffic data showed.

Many of the vessels had reported their destination as Romanian ports. Romania on Monday said that it aimed to double the monthly transit capacity of Ukrainian grain to Constanta to 4 million tonnes in the coming months.

Sunday's incident cast a pall over plans announced by Ukraine last week for a "humanitarian corridor" in the Black Sea to release cargo ships trapped in Ukraine's ports since the outbreak of war.

There are an estimated 60 vessels still stuck inside Ukrainian ports including Odesa, one of three terminals that were part of UN backed grain initiative (BSGI) that Moscow exited.

"The security guarantees given to shipping by both sides under the BSGI are no longer in effect which means that the Ukrainian Black Sea ports are effectively blockaded and out of use for commercial vessels," Norwegian ship insurer Gard said in an advisory note last week, adding that Ukrainian sea ports in the northwestern area were no longer "safe" ports contractually.

Moscow says it will return to the grain deal only if it receives better terms for its own exports of food and fertiliser. Turkish President Tayyip Erdogan, co-sponsor of the grain deal alongside the U.N., says he hopes to persuade Russian President Vladimir Putin to rejoin it at talks this month.

© Reuters. FILE PHOTO: Palau-flagged vessel Sukru Okan transits Bosphorus on its way to the Black Sea in Istanbul, Turkey August 13, 2023 this screen grab from a video. REUTERS/Yoruk Isik

The Joseph Schulte was among vessels that remained stuck in Odesa.

"We continue to do everything in our power to enable the vessel to move, despite permits and the many variables involved," a spokesperson with Schulte Group, the parent of the vessel's German based manager BSM, told Reuters on Monday. "The situation remains complex."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.