Black Sea risk outlook remains uncertain despite ceasefire proposals

By Michael Jones

March 25 - (The Insurer) - The Black Sea marine war risk environment will remain elevated and uncertain while the broader Russia-Ukraine conflict is unsettled, two senior marine war sources told The Insurer.

Questions around the marine war outlook in the Black Sea come after the U.S. and Russia engaged in talks on March 24 about a narrow proposal for ceasefire at sea between Kyiv and Moscow.

Russia said on Tuesday that it would be willing to strike a new agreement on the safety of shipping in the Black Sea, but only if the U.S. ordered Ukrainian President Volodymyr Zelenskiy to respect it.

Munro Anderson, head of operations at Pen Underwriting’s Vessel Protect, told The Insurer: “The over-riding characteristic of the current talks and their future direction is one of uncertainty.”

Anderson said that a range of sensitive proposals appeared to be on the table, including the recommencement of a grain deal, but emphasised that there were “no guarantees”.

He added that the Black Sea remains a “high-risk area” for commercial vessels, presenting significant challenges for mariners attempting to conduct lawful trade. The marine war insurance specialist pointed towards the threat of drifting sea mines, recent Russian attacks on Ukrainian ports and the tentative peace process.

One senior marine war underwriting source said that the market is unlikely to respond dramatically to the ceasefire talks given the precariousness of the process at this stage.

And the Lloyd’s Market Association’s head of marine and aviation Neil Roberts told this publication that marine war risk underwriters would continue to require notification of entry to the Black Sea area while the conflict remains unsettled.

“A ceasefire (if agreed) would not make any immediate change to that requirement, but underwriters would be able to consider any change in the risks around each voyage,” Roberts said.

Any maritime ceasefire agreement would be a successor to the previous Black Sea deal, which allowed Ukraine to safely export nearly 33 million metric tons of grain despite the war.

Russia withdrew from this agreement in July 2023, arguing that its own food and fertiliser exports faced serious issues because of Western sanctions affecting insurance, payments and logistics. Ukraine had earlier accused Russia of obstructing the initiative.