Current Situation
The world's attention is focused on the security situation after the decision of Russia's full-scale invasion of Ukraine, the war conditions affecting global commodity trade by sea and the disruption of maritime security in the region. The proof of Russia's strong warning is not something that suddenly happened, but since the beginning of Ukraine intending to register to join the North Atlantic Treaty Organizations (NATO) alliance, Russia has threatened Ukraine, which is a former state in the Soviet Union, that Russia and Ukraine are “inseparable” considering their “historical and territorial similarities”, in other words Russia feels the security threat is increasing if Ukraine becomes a member of NATO, because every alliance member must unite with the alliance if the alliance is attacked.
The war situation affecting market prices is increasing with the disruption of the security of shipping by sea which is very important for global trade and the balance of world supply. Conditions that have not yet fully recovered from the COVID-19 pandemic being hit by war again are not the ideal situation they want. According to Eurostat data, Russia has an important role in world trade, at least a quarter of global wheat trade exports come from Russia and Ukraine, Russia is also the world's main supplier of coal and 46.8% of natural gas to Europe. In the first half of 2021, Russia exported 7.6 million barrels per day of raw and processed products worldwide, three times that of Iran. Russian oil exports represent 8% of global oil demand, a tenth of the volume of global marine oil trade and about 7% of international tanker ton-miles according to data from Braemar ACM. Nearly 2% of the global tanker fleet is owned or controlled by Russian interests, with nearly 8% of ownership most concentrated in the Aframax fleet (Chambers, 2022). Supply chain interdependence between countries that own raw materials, flagged carriers, and countries of destination are the links that are heavily affected.
The unfavorable maritime security can be seen from the aftermath of Russia's full-fledged invasion of Ukraine, all commercial operations access was suspended by order of the Ukrainian military, starting from the largest port of Odessa Port, trains stopped, and airlines suspended flights to Kiev. Russia has also suspended commercial shipping in the Sea of Azov until further notice but has kept Russian ports on the Black Sea open for navigation. The situation of the territorial waters and the EEZs of the two countries are not in a safe zone, it is hoped that all commercial ships avoid the area.
The shipping industry is making contingency plans with much of Eastern Europe at high risk of becoming a war zone with the possible impact of disrupting the flow of crude oil, coal, grain and increasing demand for tons-miles depending on the level of sanctions and observing trade dislocations.
Russia has warned that no one should interfere in war affairs, but economically the United States and Europe are prepared to impose sanctions on Russia, considering that 70% of Russia's western crude oil exports are sent via Aframax (Chambers, Putin's invasion of Ukraine seen hiking tonne-mile picture for shipping, 2022). As a result, the price of oil immediately rose above $100 per barrel and is likely to continue to rise to its latest high. Among the sanctioned companies is the company that led the construction of the Nord Stream 2 gas pipeline from Russia to Germany, while five ships belonging to the Russian container line FESCO have also been slapped by sanctions from Washington.
Ukraine had asked Turkey to close the Bosphorus and Dardanelles straits to Russian warships heading to the Russian-invasion Black and Azov Seas, but Turkey was unable to fulfill this request on the grounds that it was bound by an international pact that allowed ships to return to base. Meanwhile, Russia has just suspended the movement of commercial vessels in the Sea of Azov with a buildup of vessels seen at the southern end of the Kerch Strait.
Maritime Security Area is in the Danger Zone
The Ukrainian port city of Odessa which is a logistics hub connecting Asia and Europe has been attacked, a number of ships were found stranded, including three box ships unable to leave port such as Yasa Jupiter, a Turkish cargo ship hit by a missile in the Black Sea with minor damage (Ajdin, 2022). The Moldovan-flagged chemical tanker Millennial Spirit was fired upon by a Russian Navy vessel 12 nautical miles south of the Ukrainian port of Yuzhny, and the bulk carrier Namura Queen owned by Japan's Nissen Kaiun was also allegedly hit by a rocket in the port of Yuzhny. The rescue operation was carried out by the Ukrainian authorities.
The current situation is that seafarers are under threat with two Ukrainian-flagged bulk carriers Afina and Princess Nicole detained by Russian troops sailing in Romanian waters 22 miles from Snake Island. The ship's AIS is turned off and communications are cut off. The latest data showed this morning that the ship, laden with grain, now lives 18 miles off the coast of Crimea with a total of 50 crew members captured. Kiev condemned the incident as an act of piracy (Chambers, 2022).
Maritime Security Risk Analysis Due to the Russia-Ukrainian War
The escalation of the war is increasing, the element of risk of cyber attacks (and more than that) can be carried out by Russia immediately targeted at countries that intervene in the war, this stern warning is clearly addressed specifically to the United States and NATO members. If the attack is targeted at vital trade infrastructure such as ports, it will add to the long list of damage to the international trade supply chain resulting in huge losses for the shipping industry players, cooperation partner countries, and of course countries that are at war because economic income will decrease drastically.
War can spread not only in the Russia-Ukraine region but also widely, such as the China-Taiwan conflict zone, the South China Sea between the United States and China, and other countries with rising tensions triggered by the heat of war in Russia and Ukraine. How Russia and Ukraine manage the situation will be a game changer in another conflict situation.
The disruption of international shipping complications has long consequences on the world's economic, social and security wheels. The Black Sea and Sea of Azov zones are not safe for navigation and it is unknown how long it will take to return to normal, until recovery time means ships must avoid these zones.
The world's logistical needs are threatened because of the disruption of global trade by sea due to the outbreak of war in which Russia and Ukraine are the providers of raw and processed materials and the partner countries for economic cooperation withdrew even though this caused a huge loss for all. In addition, the logistics of the two countries at war are on the brink of vulnerability plus the weather factor in winter and the closure of all access to Ukraine, the longer Russia is in Ukraine the more supplies of initial ammunition supported by artillery and air support are running out. For a ground attack Russia requires fuel, food, and other basic necessities to run its operations.
Nearby affected regional countries such as Moldova, Romania, Bulgaria and Georgia due to security threats in the Black Sea and Sea of Azov trade routes. Meanwhile, Turkey still has safe access to the Mediterranean Sea.
With the heating up of the security situation in Ukraine by a full Russian invasion, proving that the traditional threat of war still exists, therefore the readiness of the state in mitigating the disaster of war is a must to minimize the losses incurred. In the meantime, trade and shipping involving Russia and Ukraine has stopped temporarily, and the black sea area and waters around Eastern Europe should be avoided to prevent spillover from war. Currently, the priority is the safety of the local community and the fast and appropriate steps taken by the leaders of the two countries to defuse tensions so that they can negotiate in diplomacy.
REFERENCE
Ajdin, A. (2022). Carriers urged to avoid the Black Sea as Turkish bulker gets hit off Odessa. Retrieved Februari 26, 2022, from Splash 247: https://splash247.com/carriers-urged-to-avoid-the-black-sea-as-turkish-bulker-gets-hit-off-odessa/
Chambers, S. (2022). Putin’s invasion of Ukraine seen hiking tonne-mile picture for shipping. Retrieved Februari 26, 2022, from Splash 247: https://splash247.com/putins-invasion-of-ukraine-seen-hiking-tonne-mile-picture-for-shipping/
Chambers, S. (2022). What the Russia-Ukraine standoff means for global shipping. Retrieved Februari 26, 2022, from Splash 247: https://splash247.com/what-the-russia-ukraine-standoff-means-for-global-shipping/
Chambers, S. (2022). Seafarers under increased threat as two bulk carriers are detained by Russian forces. Retrieved Februari 28, 2022, from splash247.com: https://splash247.com/seafarers-under-increased-threat-as-two-bulk-carriers-are-detained-by-russian-forces/
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