War risk insurance for vessels trading in the Black Sea has tripled over the past month following Ukraine’s stepped-up drone campaign against Russia’s shadow fleet, the Financial Times reported on 7 December.
The surge effectively imposes an economic penalty on Russia’s sanctions-evading tanker network that Western governments have struggled to enforce since 2022. Insurance costs jumped from 0.25-0.3% of a ship’s value in early November to 0.5-0.75% this week—increases of up to 250%, according to Marcus Baker, head of marine and cargo at broker Marsh.
Ukrainian strikes halt Russia-linked shipping
Ukrainian special forces have intensified attacks on shadow fleet vessels and port infrastructure, including Russia’s Novorossiysk oil terminal—the terminus for Kazakhstan’s CPC pipeline, which carries 73% of Astana’s oil exports.
On 28 November, Ukrainian Security Service naval drones struck sanctioned tankers Kairos and Virat near the Bosphorus Strait, putting both out of service. Russian-linked tankers now face the steepest premium increases, followed by bulk carriers transporting grain.
The economic pressure is yielding tangible results.
Istanbul-based Besiktas Shipping announced it would halt all “Russia-related voyages” after its tanker Mersin was damaged by four explosions off the coast of Senegal—some 4,000 kilometers from the war zone.
It was at least the third shadow fleet vessel attacked in three days, Bloomberg reported. Ukrainian involvement has not been confirmed.
Attacks may extend beyond Black Sea
If Ukraine were behind the Senegal strike, it would signal a willingness to target shadow fleet operations globally. Baker told the Financial Times the attack could trigger “a general increase in war risk rates” beyond the Black Sea.
“This type of [attack] is just becoming a bit more random,” he said. “Nobody would have put Senegal on the map as a heightened war risk.”
Putin threatens—can he deliver?
On 2 December, Russian President Vladimir Putin called Ukrainian attacks “piracy” and threatened to cut Ukraine “off from the sea entirely,” warning of “retaliatory measures against countries helping Ukraine.”
Military experts are skeptical Moscow can follow through. “They would have to fully capture Kherson, Mykolayiv and Odesa regions,” Russian military analyst Kirill Mikhailov told Novaya Gazeta Europe. “At current rates, the Russian army would need years, if not decades.”
The threat rings particularly hollow given that Ukrainian drones already forced Russia’s Black Sea Fleet to relocate its headquarters from Sevastopol to Novorossiysk in late 2023.
Maxim Starchak, a researcher at Queen’s University in Canada, noted Russia could attempt a blockade by closing the Kerch Strait and deploying ships near Odesa, but added that “Russia cannot significantly scale up its presence in the Black Sea without Turkish consent, and the Black Sea Fleet is weakened.”
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Grain exports face an uncertain future
One maritime security expert, speaking anonymously to the Financial Times, said shipowners worry the standoff could prompt Russian retaliation against Ukrainian ammonia and grain exports. Jon Gahagan of risk group Sedna Global said grain export corridors had provided temporary calm since 2022, but added:
“Everybody is watching this with interest to see whether there’s a wider escalation.”
For now, the insurance market is doing what sanctions could not—making Russia’s shadow fleet increasingly expensive to operate.
