Black Sea Emerges as New Trade Chokepoint as Tanker Rates Quadruple

The Black Sea has become the latest strategic chokepoint straining global energy flows, as an intensifying campaign of drone strikes on tankers loading Russian and Kazakh crude drives freight rates to Middle East levels and pushes war-risk premiums sharply higher.

Repeated attacks on vessels at the Caspian Pipeline Consortium terminal near Novorossiysk have more than doubled tanker rates since June to around $400,000 a day, according to Seatrade Maritime. The Baltic Exchange's TD6 benchmark, tracking the route from the CPC terminal to Augusta in the Mediterranean, has climbed from roughly Worldscale 230 in mid-June to about WS530, a level comparable to rates prevailing in the Gulf. The pattern of strikes has been relentless, with Russia reporting multiple assaults on ships in the region in the first week of August alone.

The disruption is striking Kazakhstan hardest. The CPC route carries around 80 per cent of the country's oil exports and more than 1 per cent of global supply, feeding crude from the Tengiz, Kashagan and Karachaganak fields through a 1,510-kilometre pipeline to the Black Sea coast. Loadings from the terminal have fallen 62 per cent over the past fortnight against the prior four weeks, with Kazakh dirty-tanker exports hit as badly as Russian volumes. The point is sharpened by the terminal's customer base: almost three-quarters of its exports this year have been bound for EU destinations, and Western majors including Chevron and ExxonMobil are shareholders in the consortium.

The insurance market is registering the danger. Black Sea port-call cover has roughly doubled since late July, reaching as high as 2 per cent of a ship's value, with cargo cover climbing by a similar margin. What is unnerving owners most is the absence of any obvious pattern, with vessels struck despite their operators having no involvement in Russian trade, and in some cases despite being domiciled in countries allied to Ukraine. That unpredictability has begun to deter tonnage from the region altogether.

The squeeze compounds an already fraught picture for seaborne energy. With the Gulf chokepoints of Hormuz and Bab el-Mandeb still disrupted by the Middle East conflict, the emergence of a third crisis in the Black Sea leaves European importers contending with simultaneous threats across three of the routes that supply the continent's crude, tightening the margin for error as autumn contracting approaches.