Economic Consequences of the War in the Black Sea

For insurers, almost the entire Black Sea is now a zone of military risk, with the exception of the territorial waters (12 nautical miles from the coast) of Turkey, Romania, Bulgaria, and Georgia. Ukrainian and Russian waters, as well as the open part of the sea, are considered high-risk areas.

Now, insurers will certainly require prior notification, separate coverage for military risks, and an additional premium.

Furthermore, access to Ukrainian ports represents a separate factor increasing the cost of insurance and freight.

In addition, the restrictions on the operation of Black Sea ports create difficulties for Kyiv in exporting grain and increase risks for the global food market as a whole. Industry sources report that Russia and Ukraine have reduced their combined wheat exports, and the total for the July-September period may be only half of last year's volume.

✨And while Russia has the ability to export grain through alternative, albeit more expensive, routes that require additional logistical efforts, comprehensive attacks on Ukrainian logistics have reduced the overall exports of the opposing side by almost half.

⚡️Two Majors