Us, Russia and Ukraine reach key agreement, Shipping is expected to resume?
On March 25, the United States, Russia and Ukraine issued separate statements announcing a key agreement on the safety of commercial shipping in the Black Sea. Despite the differences in rhetoric, the core consensus includes prohibiting the use of force to threaten commercial vessels, preventing the militarization of commercial vessels, and stopping attacks on energy facilities.
The Russian statement noted that Russia and the United States agreed to promote the implementation of the Black Sea Initiative, which includes ensuring the safety of navigation in the Black Sea, prohibiting the use of force, preventing commercial vessels from being used for military purposes, and conducting inspections of relevant vessels.
However, the Russian side set preconditions, including lifting sanctions on the Russian Agricultural Bank and other financial institutions involved in international food trade (including fish products) and fertilizer trade, bringing them back into the SWIFT system and opening relevant accounts; Remove restrictions on trade finance operations; Lifting sanctions on grain (including fish products) and fertilizer producers and exporters, and lifting restrictions on related insurance companies; Lifting restrictions and sanctions on port services for Russian ships involved in the trade of foodstuffs (including fish products) and fertilizers; Lifting restrictions on the supply of agricultural machinery to Russia and on supplies related to food (including fish products) and fertilizer production.
The agreement is seen as the most substantial diplomatic breakthrough since the conflict between Russia and Ukraine, and could even be the cornerstone of a full ceasefire.
For the global dry bulk market, the potential normalisation of Black Sea shipping will reshape trade in food, fertiliser and coal. But whether the market can truly benefit still depends on three variables: whether geopolitical risks are materially reduced, whether export sanctions on Russia are lifted, and whether key demand parties such as China can boost imports.
Bilal Muftuoglu, head of dry bulk research at Howe Robinson Partners, said the most immediate effect of the Black Sea deal could be to boost shippers' confidence in calling at Russian and Ukrainian ports, an area that some Western operators still shun. But he stressed that Ukraine's grain exports had largely returned to pre-war levels and that the deal's boost to total dry bulk trade was likely to be limited.
BIMCO reported at the end of February that three years after the outbreak of the war between Russia and Ukraine, the total volume of dry bulk shipments between the two countries is still 6% below the pre-war level. Over the past 12 months, however, the two countries' dry bulk shipments have moved in opposite directions, with Ukrainian shipments surging 87 per cent year on year, while Russian shipments have fallen 6 per cent.
"If a sustainable peace agreement is reached, crops in Ukraine could expand and corn exports could increase." Muftuoglu added.
As for the Russian grain trade, traditional buyers in the Middle East, North Africa and East Africa have maintained a steady purchase, and the war has not caused a substantial cut in supply. But he noted that the key variable that really affected the dry bulk market was the Russian harvest and that "any significant boost to trade volumes would have to wait for the lifting of sanctions on Russian coal".
In the first two years of the war, Russian dry bulk shipments were less affected and even increased due to increased fertilizer and grain exports. But over the past 12 months, Russian coal exports fell 11 per cent and grain exports fell 2 per cent, leading to a decline in overall exports. Russian coal accounts for 50 percent of the total freight volume between the two countries.
Wilson Wirawan, head of dry bulk research at BRS Shipbrokers, said that despite the positive supply side, "the market ultimately depends on the demand side."
He cited data showing that global grain loadings have fallen 11.5 per cent year on year so far in 2025, total grain shipments by sea rose only 0.7 per cent last year, and Chinese imports have shrunk. "If Chinese purchases do not pick up in 2025, any supply-side improvement will have little effect," he said.
Beyond grain, trade in fertilisers could be in for a major shake-up. Mr Muftuoglu predicted the ceasefire could lead to a surge in Russian fertiliser exports, particularly potash, to the US, which is imposing tariffs on Canada's potash.
Another potential change is that the EU could reassess its stance on taxing Russian fertiliser imports. On March 14, the European Council passed a proposal to impose tariffs on surplus Russian and white agricultural products and some nitrogen fertilizers, involving 15% of Russia's agricultural imports (based on 2023 data).
The Russian statement noted that Russia and the United States agreed to promote the implementation of the Black Sea Initiative, which includes ensuring the safety of navigation in the Black Sea, prohibiting the use of force, preventing commercial vessels from being used for military purposes, and conducting inspections of relevant vessels.
However, the Russian side set preconditions, including lifting sanctions on the Russian Agricultural Bank and other financial institutions involved in international food trade (including fish products) and fertilizer trade, bringing them back into the SWIFT system and opening relevant accounts; Remove restrictions on trade finance operations; Lifting sanctions on grain (including fish products) and fertilizer producers and exporters, and lifting restrictions on related insurance companies; Lifting restrictions and sanctions on port services for Russian ships involved in the trade of foodstuffs (including fish products) and fertilizers; Lifting restrictions on the supply of agricultural machinery to Russia and on supplies related to food (including fish products) and fertilizer production.
The agreement is seen as the most substantial diplomatic breakthrough since the conflict between Russia and Ukraine, and could even be the cornerstone of a full ceasefire.
For the global dry bulk market, the potential normalisation of Black Sea shipping will reshape trade in food, fertiliser and coal. But whether the market can truly benefit still depends on three variables: whether geopolitical risks are materially reduced, whether export sanctions on Russia are lifted, and whether key demand parties such as China can boost imports.
Bilal Muftuoglu, head of dry bulk research at Howe Robinson Partners, said the most immediate effect of the Black Sea deal could be to boost shippers' confidence in calling at Russian and Ukrainian ports, an area that some Western operators still shun. But he stressed that Ukraine's grain exports had largely returned to pre-war levels and that the deal's boost to total dry bulk trade was likely to be limited.
BIMCO reported at the end of February that three years after the outbreak of the war between Russia and Ukraine, the total volume of dry bulk shipments between the two countries is still 6% below the pre-war level. Over the past 12 months, however, the two countries' dry bulk shipments have moved in opposite directions, with Ukrainian shipments surging 87 per cent year on year, while Russian shipments have fallen 6 per cent.
"If a sustainable peace agreement is reached, crops in Ukraine could expand and corn exports could increase." Muftuoglu added.
As for the Russian grain trade, traditional buyers in the Middle East, North Africa and East Africa have maintained a steady purchase, and the war has not caused a substantial cut in supply. But he noted that the key variable that really affected the dry bulk market was the Russian harvest and that "any significant boost to trade volumes would have to wait for the lifting of sanctions on Russian coal".
In the first two years of the war, Russian dry bulk shipments were less affected and even increased due to increased fertilizer and grain exports. But over the past 12 months, Russian coal exports fell 11 per cent and grain exports fell 2 per cent, leading to a decline in overall exports. Russian coal accounts for 50 percent of the total freight volume between the two countries.
Wilson Wirawan, head of dry bulk research at BRS Shipbrokers, said that despite the positive supply side, "the market ultimately depends on the demand side."
He cited data showing that global grain loadings have fallen 11.5 per cent year on year so far in 2025, total grain shipments by sea rose only 0.7 per cent last year, and Chinese imports have shrunk. "If Chinese purchases do not pick up in 2025, any supply-side improvement will have little effect," he said.
Beyond grain, trade in fertilisers could be in for a major shake-up. Mr Muftuoglu predicted the ceasefire could lead to a surge in Russian fertiliser exports, particularly potash, to the US, which is imposing tariffs on Canada's potash.
Another potential change is that the EU could reassess its stance on taxing Russian fertiliser imports. On March 14, the European Council passed a proposal to impose tariffs on surplus Russian and white agricultural products and some nitrogen fertilizers, involving 15% of Russia's agricultural imports (based on 2023 data).
