The price of maritime paralysis: how the blockade of the Black and Azov Seas destroys the exports of the occupying country

The Ukrainian campaign of blockade and systematic attacks on the occupying country’s facilities in the Sea of Azov has paralyzed Russian maritime logistics, provoking serious economic and infrastructure problems for the aggressor country. As a result of the closure of navigation through the Kerch Strait and the destruction of transport vessels, the occupying country has lost key export arteries precisely at the height of the harvesting campaign.

A significant loss for the occupiers was the blockade of deep-water ports in the Sea of Azov. In particular, Berdyansk, which the Russian Federation used as one of the key ports for the logistical support of the occupation army. In addition, grain crops harvested in the occupied Zaporizhia and Donetsk regions were shipped through this port.

In addition to agricultural products, heavy metallurgy products, mineral fertilizers. The occupiers recognize the fact that as a result of attacks by Ukrainian UAVs on dry cargo ships and barges, Russian grain exports have decreased by almost 30%. This is a colossal undersupply to the Russian budget.

The strikes by the Ukrainian Defense Forces on Russian transport infrastructure have significantly complicated the export of Russian agricultural products, leading to multi-billion dollar losses for the Russian budget.

This concerns the blockade of the Sea of Azov, which the Russians mistakenly consider to be an internal sea of the Russian Federation, as well as a serious restriction on the supply of Russian crude oil through the Bosphorus and the Dardanelles to end consumers. I focus on crude oil because, after the strikes by the Ukrainian Defense Forces on oil refineries, Russia has largely lost the ability to process it and produce gasoline and diesel fuel.

As a result, the supply of petroleum products to end consumers has become extremely complicated. Therefore, the Kremlin is trying to compensate for the catastrophic budget losses by exporting crude oil. However, as we see, this strategy is not giving the desired result either.

It is worth noting that in July, as a result of systematic attacks by the Armed Forces of Ukraine on Russian infrastructure and tankers in the Black and Azov Seas, the transportation of Russian oil products decreased by 45.6% compared to June. Shipments of oil products from the ports of the Sea of Azov (including the ports of the Volga and Don rivers) decreased by 64.3% or 2.8 times. In the Black Sea, Russian crude oil exports in July decreased by 18.1%.

As a reminder, the occupying country imposed a ban on the export of diesel fuel from July 8 to 31 as part of a broader package of measures to support the domestic fuel market. Subsequently, the Russian government extended the ban on the export of gasoline until January 31, 2027, and diesel until August 31, 2026.

Historically, Russia itself is one of the largest exporters of diesel. About 40-50% of the fuel produced was exported abroad. For example, in 2023, domestic consumption of diesel amounted to 52.2 million tons, and 35.7 million went for export.

However, the strikes on refineries, which have reduced oil refining in Russia to 20-year lows, have led to a reduction in diesel output by almost 40% – even more than gasoline, which has seen its output fall by a quarter.

Ukrainian drones have effectively blocked the movement of Russian dry cargo and bulk carriers in the Black Sea. Moreover, the intensity of these strikes is constantly increasing. The occupiers are forced to admit that the Sea of Azov is effectively blocked, and the transportation of oil through the Black Sea is under great question. In addition, the Don-Azov Canal has been blocked. All this means the most serious losses for the Russian budget.

The navigation stoppage is forcing the Russian Ministry of Transport to look for alternative railway routes, which sharply increases the cost of logistics and leads to direct losses for producers amid the filling of domestic storage facilities.

In turn, the destruction of the tanker fleet by the Ukrainian defense forces has made it impossible to export Russian oil products through the Sea of Azov. The damaged vessels, which are drifting and require towing, have blocked traffic, making it difficult to supply fuel and military cargo to the occupied peninsula.

An attempt to redirect flows to ports like Novorossiysk creates an infrastructure collapse, as the rail network and terminals are not designed for an emergency doubling of volumes.

The negative consequences for Russians also extend to the agricultural sector.

Due to the high risk of ships being destroyed, the Russian authorities temporarily stopped accepting applications for passage through the Kerch Strait, which completely blocked the Don-Azov route. It is worth noting that the occupying country exported about 27–30% of its grain (over 14 million tons per season) via this route. Due to the blockade, Russian grain exports in July fell to their lowest level since 2017.

IKAR analysts recorded a 20% drop in grain exports from the planned level (to 2 million tons instead of 2.5 million tons) due to logistical paralysis. This means a corresponding decrease in foreign exchange earnings from the sale of agricultural products on world markets. And, as the Russians themselves like to say, “we haven’t even started yet.” This is about further increasing the intensity of Ukrainian strikes.

I would like to note that the Russian air defense system is not coping with the growing number of attacks. The enemy is forced to admit that the possibilities to counter Ukrainian attacks are actually minimal. The enemy’s air defense system demonstrates low efficiency, while the number and quality of strikes by the Ukrainian side are constantly increasing.

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