About a year after the war of attrition against Ukraine in the energy field, Russia is applying the same tactics against the grain export infrastructure of the Odesa region. In this regard, in July 2022, the Russian side launched an offensive with missiles and "kamikaze drones" against the sea and river ports of Odesa. In order to carry out these attacks, Russia unilaterally left the "grain deal" in July 2023, leaving both the Odesa port infrastructure and the ships carrying Odesa's agricultural produce without guarantees of international protection. By destroying Ukraine's critical infrastructure upon which the storage and transportation of Ukrainian grain depend, the Russian authorities may be targeting a complex set of local and global goals.

It is becoming increasingly clear that Moscow is instrumentalising the war in Ukraine to produce crises with transboundary effects and then extract "geopolitical opportunities" for itself. By decimating Ukraine's agricultural potential, including by sabotaging transport routes on the Black Sea and the Danube, Russia wants to reduce Ukraine's importance on the world market. The objective seems to be the de-internationalisation of the war in Ukraine and the de-solidarisation with the Ukrainian cause.

The Russian attack on Odesa's ports and grain-collection infrastructure comes sometime after the destruction of the Kakhovka dam, which had devastating consequences for the irrigation system in the southern regions of Ukraine. In addition, the destruction of export capacities on the eve of the harvest may create financial difficulties for the Ukrainian agricultural sector, which is already facing the loss of arable land due to the occupation or mining of land by Russian forces. Last but not least, the destruction of the Odesa ports takes place against the background of the cancellation of the "grain agreement" by Russia in the conditions of price volatility on the international agri-food market, caused by the intensification of cyclicity and severity of natural disasters. After Western sanctions eroded its energy superiority, Moscow plans to position itself as the world's main "grain basket". By taking advantage of global access to "bread", Russia is trying new ways to impose peace on Ukraine. In addition, with the elimination of Ukraine as an alternative agricultural source, the Moscow regime intends to increase its role in the field of global food security in order to exert influence in the Global South, especially in Africa, rich in critical mineral resources, but massively exposed to the effects of climate change.

From one "war of attrition" to another

In the autumn of 2022, Russia was using airstrikes to destroy critical energy infrastructure. The intention was to provoke a humanitarian and economic crisis that would undermine Ukraine's military offensive capabilities to liberate territories from Russian occupation. According to data from April 2023, material losses in the energy sector reached about $10bn, and the population with limited or no access to stable sources of energy reached $12mn people. The UN has estimated that the rehabilitation of the energy sector before the 2023/2024 winter season requires an expenditure of almost $1.2bn. The most affected is the electricity production sector. Additionally, the same sector suffers the consequences caused by the destruction of the Kakhovka hydroelectric dam (HPP) and the threat to the safety of the occupied Zaporizhzhia Nuclear Power Plant (NPP), which remains disconnected from the rest of the Ukrainian energy system. Russia has orchestrated that to distract Kyiv from the counter-offensive and increase the costs of the war for Ukraine and its supporters in the West.

Before launching the attacks on the Odesite ports, the Russian side unilaterally abandoned the "grain agreement", which Turkey and the UN had negotiated between Ukraine and Russia. Established in July 2022, the agreement guaranteed the safe transportation of grain from Ukrainian-controlled ports in the Black Sea basin to global markets. The deadline to renew the agreement was July 17, but Russia opposed it, making the extension conditional on the lifting of certain sanctions. The connection to the international banking payment system SWIFT of the subsidiary of Rosselkhozbank and the removal of restrictions in the field of maritime transport, with reference to access to European ports, were among Russia's demands. Although Western sanctions create costs for Russia, their maintenance has not stopped agricultural exports from Russian producers. In addition, the UN identified a technical solution that would have allowed Rosselkhozbank to carry out financial transactions outside Swift, but Moscow rejected it. Therefore, the conditionality imposed by Russia was used as a political-diplomatic pretext for justifying its unilateral cancellation of the “grain agreement”. Thus, Russia removed the ports of the Odesa region from the indirect protection of the UN, exposing them to Russian attacks with missiles and drones.

Russia is trying to capitalise on the combined effect of the destruction of Ukraine's agricultural production capacities, the fragile situation on the world agri-food market and natural cataclysms related to worsening climate change to fuel the debate on "peace at any price". Although Ukraine has many allies who support its counter-offensive, Russia is attempting to push the issue of peace on to the public and political agenda of the upcoming elections in the West, especially in the US, scheduled for 2024.

The destruction of the ports of Odessa and the regional consequences for the export of grain

Insecurity around the Odesite ports that has been generated by Russian missile and drone attacks is putting massive constraints on Ukraine's grain exports. Until a protective umbrella is created over Odesa with the help of Western air defence systems, it is vital to identify alternative solutions for the delivery of agricultural products from Ukraine. The redirection of exports by rail and other land routes belonging to the EU states and Moldova implies new investments in transport infrastructure. Otherwise congestion will be inevitable and will affect the supply of other goods to the countries bordering Ukraine. In addition, there will be costs related to the extension of the delivery time. Until this situation, the Ukrainian state needed about $5bn in the form of monthly loans to support the national budget. Other recent expenses relate to managing the consequences of dam operation at the Kakhovka HPP. This resulted in the destruction of irrigation systems and increased risks of desertification in the Kherson, Dnipro, Zaporozhizhie and Donetsk regions. Flood damage from the destroyed dam is estimated at $1.2bn, and the flooded and surrounding land has been rendered unusable for agricultural activities for the next 3-5 years, requiring rehabilitation and decontamination. In addition, other costs are related to land clearance efforts in Ukraine. Russia has used around 13 types of mines, and the cost to deactivate and clear the mines is approximately $37bn over the next 10 years. The demining budget could be increased for efficiency purposes. Otherwise, the process could take up to 750+ years, assuming a minimum of 500 demining teams are involved. Therefore, the request for additional funding to redirect the flow of agricultural products may cause political irritation and financial austerity reflexes in some Western states that currently provide financial assistance to Ukraine.

At the regional level, the dismantling of Odesa's ports risks putting pressure on two critical points in relation to the EU:

The first sensitive issue concerns the liberalisation of the export of agricultural products from Ukraine. While the EU extended quota- and tariff-free imports of Ukrainian products for another year in June (EU, June 2023), it will have to keep intact the restrictions on four categories of Ukrainian agricultural products (wheat, corn, sunflower seeds and rapeseed). Five EU states geographically close to Ukraine are calling for the bans to be extended until next year. Poland, Slovakia, Hungary, Romania and Bulgaria formed a common front, arguing that otherwise the storage capacities for the new crop and the financial stability of local farmers could be compromised (Euronews, June 2023). Another affected country is Moldova, but its authorities refuse to align with the position of the five European states to avoid reciprocation from Ukraine. Ukrainian agri-food products are sold in the internal markets of the five EU countries, reducing the sale price below the value of the investments made. The destruction of the Odesite ports will require 40% or more than 30mn tonnes of Ukraine's total agri-food exports, previously exported through the Black Sea corridor, to be transferred through the "green corridors" of the EU. Thus EU states already opposed to full liberalisation with regard to Ukraine could become more incisive or, less likely, be joined by others.

The second critical aspect concerns the creation of new corridors for the transport of Ukrainian grain. The EU noted that there are several options to facilitate this process, including moving customs points from the Ukrainian border to countries further inside the EU. Lithuania promotes the port of Klaipeda and those of the neighbouring Baltic states to achieve the export of some 25mn tonnes of Ukrainian wheat annually. Other options are ports in Germany (Hamburg and Rostock), the Netherlands (Rotterdam), Croatia (Rijeka), Italy (Trieste) and Slovenia (Koper). The realisation of these initiatives requires financing to adjust the infrastructure, and this financing must come from the EU, which has limited resources for this type of project. So far, the EU has already allocated more than €350mn to improve the capacities of the "green corridors", which includes increasing connectivity (rail, border crossings, etc.) between Ukraine, on the one hand, and Poland, Romania, Hungary, Slovakia and Moldova, on the other hand. Most of these funds will go to Poland and Romania. A further €700mn has been announced in the form of investments from the EIB, the EBRD and the World Bank until the end of 2023. Along with the destruction of the capacities of the ports of Odesa with access to the Black Sea and the threats to the security of those in the Danube region (Reni, Ismail and Kilia), the volumes of agricultural products exported through the "green corridors" should be doubled. Consequently, other EU states will require European funding to replace the Odesite ports.

The three scenarios regarding the crisis of "grain supplies from Ukraine"

The evolution of the situation in the ports of Odesa depends on a number of factors. The intensity of the attacks will be influenced by the availability of missiles and drones in Russia's arsenal. In addition, the ability of Ukraine to build a protective umbrella over all Odesa ports involved in export operations. In this regard, new air defence systems are needed, or the relocation of existing ones from other geographical points of Ukraine, which also need protection. Earlier, Ukraine had discussed the creation of a new corridor, which would run through the territorial waters of the Nato states Romania, Bulgaria and Turkey. But the issue of the Odesite ports remains unresolved because Russia wants them dysfunctional.

The main plausible scenarios that can materialize depending on the evolution of the factors mentioned above include 1) the restoration of transport in the Black Sea; 2) redirecting the flow towards "green corridors"; 3) a combination of the first two scenarios.

1. Restoration of transport on the Black Sea. For this scenario to take root, Ukraine needs military assistance to install air defense systems around its ports in Odesa. The new corridor will also include navigation through the waters of Nato states, which will prevent Russia from attacking them without activating Article 5 on collective defence. With that combined protection, the use of transport capacities through Odesa can be resumed, but not in the immediate future.
2. Redirection of flows towards "green corridors". If the first scenario does not materialise in a reasonable time of a maximum of one month, then the alternative is the transfer of exports of agricultural products to solidarity corridors within the EU. However, this process will require additional European funds to find new ports that can export Ukrainian agricultural production. So far, the EU has not announced whether it can quickly identify new financial resources to expand the connectivity potential between Ukraine and other Baltic and Adriatic ports.
3. A combination of solutions. Repairing the port infrastructure destroyed by Russia and providing air protection can take time. Given the approaching harvest period, Ukraine will need "green corridors" to manage to export agricultural products from warehouses and guarantee capacities for new production. Therefore the redirection of flows may be a temporary solution until the Odesa ports become viable again and Ukraine and external partners, including Nato and the UN, lay the groundwork for a new Black Sea corridor to protect the uninterrupted flow of agricultural products from Ukraine to the foreign market.

Conclusions

Russia is trying to multiply the consequences of its military aggression against Ukraine by destroying the ports of Odesa, which may affect Ukraine's agricultural production capacity. Combined with the volatility of the world wheat market and natural disasters, exacerbated by climate change, Moscow wants to force a "peace at any price."

The Ukrainian counteroffensive implies uncertainties for the Russian occupation forces, and the elites around Vladimir Putin have resumed the discussion about the use of tactical nuclear weapons. Another option that the Russian side can use is to sabotage the Zaporizhzhia NPP, using the Kakhovka operation as a reference.

Finally, the Moscow regime aims to increase its role in global food security, and the removal of Ukraine as an alternative agricultural source is a step in this direction. Lacking prior power in the energy sector, Russia is trying to carve out a new global superiority at the expense of reliance on the international market for critical agricultural production supplies.