Port Of Call
Among the conflict’s major consequences is the challenge of getting Ukrainian grain to European and North African buyers. This has unleashed global concerns about food insecurity, which an agreement between Ukraine and Russia, brokered by Turkey and the UN, has partially relieved. The pact created “Solidarity Lanes” that safely connect Ukraine to its export markets by land and water. However, the underdevelopment of regional ports, alongside the limited freedom of Black Sea navigation brought on by Russia’s military aggression, still creates congestion, bottlenecks, and delays that restrict the amount of Ukrainian agricultural and other exports.
As a major trade corridor in times of war and peace, the Black Sea is vital for the transport of many Ukrainian goods. On its north coast, the port of Odesa, Ukraine’s largest, remains, in the long term, the primary gateway for these products, despite the limited operations that the war permits. Agricultural goods also flow through Europe’s fourth-largest port in Constanta, Romania, on the Black Sea’s west coast. This hub has been on the most important route for Ukrainian exports to Europe since the beginning of the war, and plans are underway to enlarge it, in part by increasing its capacity to store grain.
Constanta will also gain from expanding oil and gas exploration. The Black Sea is already key for meeting Europe’s energy needs as oil and gas from the South Caucasus and Central Asia flow through several east coast ports, including Batumi. This small Georgian facility has only modest export capacity, one reason for the construction of a much larger gateway a mere 80 kilometers away. Anaklia is projected to offer an export capacity more than quadruple that of Batumi’s by 2027. It will also boast a terminal to transport liquefied natural gas (LNG) from Azerbaijan to Europe.
But the future of the entire Black Sea, for three reasons, will be no less critical to regional prosperity and stability than it is today. First, it will be of paramount importance to Ukraine’s reconstruction once the war ends. The port of Odesa will provide an entry point for goods needed to rebuild while continuing to serve as an outlet for Ukrainian exports. And, as more and larger grain terminals will be needed, the expanded port of Constanta may well become another center for a Ukrainian imports and exports, not to mention those for Romania. Constanta is now overrun by Ukrainian exports, delaying the transport of Romanian goods, including grain, a notable detriment to local businesses.
Second, as Europe will require fossil fuels until it transitions fully to green energy, South Caucasus and Central Asian oil and gas will retain its importance. Batumi’s future LNG terminal and the new port of Anaklia will be able to handle greater quantities of both, an especially attractive prospect as new gas fields come on line.
Third, the Black Sea is on course to become another venue for great-power competition. As the EU and the United States look to counter China’s Belt and Road Initiative, they will also seek to limit any Chinese role in Black Sea port development. Beijing is already bidding for port administration, development, handling of goods, and terminal management, as it has elsewhere in Europe. Brussels and Washington should make resources available to block this. The Global Gateway, the EU’s version of the Belt and Road Initiative, could be one source of funding for Black Sea port modernization that does not endanger the environmentally fragile Danube Delta. The Three Seas Initiative, which brings together 12 EU member states, and to which the United States has pledged its financial contribution, could serve as another financing instrument, as could public-private partnerships. Romania should take the first step in this process. It will preside over this year’s Three Seas Initiative summit in September and should ensure that port development is on the meeting agenda. It should then advocate for allocating resources to that effort.
The Black Sea is much more that a strategically important waterway. It is a critical east-west and north-south transport corridor that can contribute significantly to Ukrainian reconstruction and European energy diversification. But it needs to reach its full potential to do both, and that means further port development. Washington should keep this in mind as it develops its first Black Sea strategy. Port development would be a key contributor to regional stability and prosperity.