Putin Downplays Attacks, Cites Resilience

Russian President Vladimir Putin told a meeting of the Council for Strategic Development and National Projects that Russia's trade infrastructure "operates effectively and remains resilient despite recent terrorist attacks." He acknowledged that operations are running under "intense pressure" but said workers are coping well, as reported by TASS.

Putin also asked the government to adopt a program to restore logistics and warehouse facilities damaged in Ukrainian attacks, saying they should be rebuilt "at a fundamentally new technological level." He called the construction of power grids "an essential task," according to TASS.

In a state media interview published Saturday, Putin accused Ukraine of opening a "Pandora's box" by striking Russian economic targets, promising retaliation against Ukraine's "most sensitive economic sectors." He said the attacks would not cause global food shortages because Russia could replace Ukrainian exports, and acknowledged challenges in shipping goods but said they would be resolved.

Kremlin spokesman Dmitry Peskov echoed that message, saying measures have been identified to ensure all grain intended for export is shipped "on time and in full," despite what he called the "aggressive, unlawful conduct" of the Kyiv regime. Peskov said Ukraine is "feeling the consequences" of opening Pandora's box "every day and every night," and that its strikes have failed to influence front-line dynamics.

Tit-for-Tat Escalation Hits Grain Shipping

Ukraine this summer escalated a campaign of drone strikes targeting Russian economic infrastructure, including oil refineries and online retailers' warehouses, as part of what President Volodymyr Zelensky called a "40-day campaign" of deep strikes. Since July, Ukraine has also targeted Russian ships transporting grain through the Black Sea and struck rail and port infrastructure around the Sea of Azov, including grain terminals at Novorossiysk.

Russia has responded with strikes on Ukrainian grain silos and port facilities around Odesa, as well as shelling ships attempting to dock. The tit-for-tat attacks have shut grain terminals and forced shippers to delay or cancel loadings for dozens of cargoes during the peak export season, as reported by Reuters and other outlets.

Both sides have struck commercial container ships and grain export terminals, effectively cutting off grain shipping through the Black Sea. The attacks have raised concerns about global wheat supplies, since Russia and Ukraine together account for more than a quarter of world agricultural exports.

Diplomatic Stalemate Over Black Sea Ceasefire

Zelensky said Russia was "not ready" for a ceasefire on attacks on ships in the Black Sea carrying agricultural produce, as Moscow wants to extend any deal to cover attacks on Russian refineries and pipelines. Reuters reported that Ukraine sent Russia an offer to halt attacks on civilian targets in the Black Sea, but Russia dismissed it as "half-measures."

Zelensky proposed that vessels from certain leaders transport food from Ukrainian ports, with no attacks on their ships if they also picked up agricultural exports from Russia. Moscow, however, wanted a quid pro quo: halting attacks on Ukraine's grain corridor if Kyiv halted strikes on Russian energy infrastructure. Zelensky said Russia's focus is "exclusively about their energy sector, not about grain."

Moscow and Kyiv have accused each other of intensified attacks on vessels used for food exports. Russia and Ukraine had previously adhered to a Turkish-brokered deal to protect grain exports on the Black Sea, but Russia exited the deal in 2023.

Impact on Ukraine

Ukraine's grain exports fell by approximately 75% year-on-year in the first two weeks of August, according to French broadcaster France 24. Agriculture Minister Taras Vysotsky said the country's grain storage shortfall could reach up to 11 million metric tonnes. Farmers have already harvested more than 28 million tonnes of grains and pulses, with the corn harvest estimated at some 33 million metric tonnes.

Oleh Nivievskyi, an expert quoted by France 24, said the blockade weighs far heavier on Ukraine than on Russia, and that a renewed blockade could prove harsher than in 2022. Domestic grain prices in Ukraine are now low compared to world market prices and production costs.

Kiev is starting to see shortages of produce in grocery stores and markets, as reported by The Gateway Pundit, citing The New York Times. Russian missiles struck at least four warehouses for one supermarket supply company on Aug. 5, killing at least six workers. Russian forces have also increased attacks on Ukrainian cities, with massive strikes on July 19 and 29, and August 1, 5, 8 and 20.

Last winter, millions of Ukrainians were left without power and heating due to Russian attacks on the country's electricity network. Russia has devastated Ukraine's energy infrastructure throughout the war.

Russia's Countermeasures

The Kremlin said measures were being taken to minimise the impact of Ukrainian strikes on Russian grain exports. President Putin estimated Russia would have about 60 million tons of grain for export this season, with exports expected to pick up to 2.2 million metric tons in August from 1.95 million in July. Russia is also trying to reroute grain shipments through the Caspian and Baltic Seas.

The Danube River, an alternative route for Ukrainian grain, has fallen to historically low levels and its ports come under regular attack from Russian drones and missiles. Rail and river can carry only a third of what used to flow through Black Sea ports.

Broader Context

Russia's agricultural exports last year made up less than 10% of its total export revenues, while agriculture made up a fifth of Ukraine's economy in peacetime. The renewed blockade comes as Ukraine's farmers face harvesting and planting for winter crops.

European partners' willingness to help Ukraine is not as strong as in 2022, according to Nivievskyi. Poland, Slovakia and Hungary maintain bans on specific Ukrainian agricultural goods, despite EU liberalization efforts.