Russian invasion: bulker hit in Black Sea, US hits Sovcomflot with sanctions

In its country threat assessment published 24 February, maritime security advisory firm Dryad Global assigned a ’severe’ risk level to the areas waters, following on the back of London’s Joint War Committee’s listing of the Black Sea and Sea of Azov for the purposes of insurance premiums.

"The current risk to commercial operations in Ukrainian [waters] is assessed as SEVERE due to the Russian blockade of the port of Odessa and due to the potentiality for a blockade of the Kerch Strait and Sea of Azov," Dryad Global’s report said. 

The severe category advises of the high likelihood of incidents expected in the region on a weekly basis.

"The current risk to commercial operations in Ukrainian [waters] is twofold and stems primarily from the Russian naval blockade of the port of Odessa as well as from a potential Russian blockade of the Kerch Strait which would effectively block all maritime traffic to and from Ukrainian ports in the Sea of Azov. At this time, Dryad advises all vessels to avoid maritime operations in the Sea of Azov," Dryad Global said.

The Baltic Exchange on Thursday posted decade-high rates for its dirty tanker index (BDTI), a major barometer for crude shipping rates, for the Black Sea and Baltic regions. 

Also on Thursday, the US’ Treasury department and the White House announced an expansion of sanctions targets that included Russian shipping interests and banks that finance Russian shipping.

Among the entities affected were Russia’s largest maritime and freight shipping company, Sovcomflot (Joint Stock Company) and Gazprom, which released a statement saying "Russian gas for transit via Ukraine as normal, in line with requests from European consumers," according to Platts Global.

A White House statement said the debt and equity restrictions contained within the sanctions will cut capital and revenue available to the Kremlin.

"New debt and equity restrictions on 13 of the most critical major Russian enterprises and entities. This includes restrictions on all transactions in, provision of financing for, and other dealings in new debt of greater than 14 days maturity and new equity issued by 13 Russian state-owned enterprises and entities: Sberbank, AlfaBank, Credit Bank of Moscow, Gazprombank, Russian Agricultural Bank, Gazprom, Gazprom Neft, Transneft, Rostelecom, RusHydro, Alrosa, Sovcomflot, and Russian Railways. These entities, including companies critical to the Russian economy with estimated assets of nearly US$1.4Tn, will not be able to raise money through the US market — a key source of capital and revenue generation, which limits the Kremlin’s ability to raise money for its activity," the White House statement said.

Sanctions from the United Kingdom include individuals linked to energy firm Gazprom, including Boris Rotenberg, a co-owner of SMP Bank and his nephew Igor Rotenberg, who controls transport businesses in Russia. The UK’s sanctions also include the United Shipbuilding Corporation, the largest shipbuilding entity in Russia, which takes on contracts for maintenance and building of Russian warships, but also operates in the offshore oil and gas sector.

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