How the Crimean crisis is affecting Black Sea ports

The Crimean crisis is affecting the peninsula’s ports and is likely to have repercussions far beyond in Ukraine, Russia and even – to a much lesser extent – Turkey, local analysts predict.

De facto control of Crimean ports recently shifted from Ukraine to Russia. The intermodal links which connected the peninsula with continental Ukraine are likely to break, including for instance for the imports that came through the Evpatoriya Ro-Ro terminal, say Informall consultants.

The future of the Avlita terminal in Sevastopol is uncertain as most of its volumes came from outside Crimea, project manager Andrey Sokolov told Port Finance International. That facility relies heavily on metal exports (about 3.2 million tonnes in 2013) by Ukrainian group SCM. The rest of the traffic consists of grain exported by international traders such as Louis Dreyfus, Cargill, and Alfred Toepfer (1.4 million tonnes in 2013).

Mr. Sokolov sees the Feodosiya port losing its oil volumes to the Russian port of Taman. Most of that oil comes from Kazakhstani joint venture Tengizchevroil (owned 50% by Chevron), which has its own terminal in Taman. Tengizchevroil has already started reducing its volumes in Feodosiya in favour of Taman and could completely shift to that terminal in the near future. The Crimean port would then retain only small volumes, like the 400,000 tonnes of construction material it exported last year.

The overall volumes handled at Crimean ports dropped more than 27% from 16 million tonnes in 2012 to 11.6 million tonnes in 2013 (4.8 million in Sevastopol). In January and February, they fell by 25% compared to the same period last year.

The deep-sea port that a Chinese company wanted to construct in Sevastopol is unlikely to be built. For that project, Beijing Interoceanic Canal Investment Management (BICIM) was partnering with Ukrainian company Kievgidroinvest. Informall thinks that this can no longer be carried out with a Ukrainian company. The consultancy firm adds that Russia has no interest in developing such a port, as it is satisfied with existing facilities in Crimea and a port project in Taman.

Mr. Sokolov notes that the political tensions are affecting Ukrainian ports. The exchange rate of the Ukrainian hryvnia has plummeted 37.5%, stimulating exports (such as wood) but reducing imports. Mr. Sokolov expects container throughput to plunge 15-30% this year.

With economic sanctions against Moscow, the Russian Black Sea port of Novorossiysk may see its trade volumes diminish.

Other countries around the Black Sea are not expected to be affected, apart from Turkey, and then only marginally. Turkey represents about 10% of Ukrainian import/export trade (about 60,000 TEUs), so a 30% plunge would lose Turkey only 20,000 TEUs.