Geopolitics drew attention once again in 2025, as hostilities between Ukraine and Russia escalated, casting uncertainty over the Black Sea market. Ukraine deployed a coordinated mix of cruise missiles and strike drones, targeting oil-loading facilities at Novorossiysk port. The attack forced a brief suspension of operations, also affecting briefly the neighbouring CPC terminal. In response, Russia launched a drone strike on Odesa, Ukraine’s primary agricultural export hub, damaging local power facilities. These events follow Russia’s large strike on Ukraine’s natural gas pipeline network in October, a calculated attempt to sever gas supply and heighten economic pressure ahead of winter. Targeting energy infrastructure has been a persistent element of the conflict since the 2022 invasion, with Russia systematically striking power generation and heating systems, while Ukraine has repeatedly targeted Russian refineries, fuel depots, and export terminals
The tanker market reacted to these developments, with Suezmax TD6 spot rate (Black Sea-Mediterranean), rising by 6% and continuing to climb, surpassing currently $105,000/day. While news of Novorossiysk’s resumption of operations helped ease concerns over supply shortages, the continued hostilities underscore the fragility in the Black Sea, a maritime corridor historically central to both military and commercial strategy and today vital for global Suezmax and Aframax trades, as Novorossiysk alone handles approximately 2% of global oil exports. Moreover, the proximity of the CPC terminal, which moves roughly 80% of Kazakhstan’s crude oil output from the oilfield of Tengiz to Black Sea via pipeline through Russian territory, further amplifies the strategic importance of the area. A prolonged closure caused by escalating hostilities could force Kazakhstan to reroute volumes through the Caspian Sea and the BTC pipeline to Ceyhan, Turkey. While operationally feasible and entailing less geopolitical risk since it avoids Russian territory, this alternative is slower, costlier, and more logistically complex. Despite Novorossiysk reopening and Black Sea trade routes remaining operational, the risk of renewed disruptions persists, as winter amplifies the strategic significance of energy assets, and both Russia and Ukraine have already demonstrated their willingness and capability to strike them.
Additionally, critical factor in such operational interruptions is the duration, as brief closures may trigger short-term spot rate spikes, though market sentiment typically eases once operations resume. A more prolonged disruption would likely lead to more sustained freight increases amid limited regional tonnage as some owners would avoid the region, increased war-risk premiums, and eventually reshape of trade flows.
In parallel with ongoing military operations, Ukraine is addressing energy shortfalls ahead of the winter heating season caused by the Russian strikes on domestic gas pipelines in October. To this end, it has secured an agreement with Greece to import US LNG, with subsequent transit via pipeline using Greece’s regasification terminals and the Vertical Corridor network through Bulgaria, Romania, and Moldova. While more expensive than previous overland sources, the arrangement is critical to meeting Ukraine’s urgent natural gas needs, ensuring winter heating, and simultaneously reinforcing Greece’s strategic role as a key entry point for US LNG into Europe. From a shipping perspective, the deal shifts incremental natural gas volumes from overland to seaborne transport, supporting transatlantic LNG demand and partially absorbing a portion of the expanding US natural gas output.
Looking ahead, the ongoing Russia-Ukraine war continues to pose a risk to Black Sea energy flows as geopolitical tensions and hostilities intensify. At the same time, Ukraine’s urgent gas needs are driving additional US LNG exports, highlighting the link between geopolitics and global energy markets. Overall, geopolitics remains a key driver of energy markets in 2025, with attacks on critical assets, such as oil terminals and power grids, creating persistent uncertainty and prompting market participants to closely monitor developments, as the conflict on the Ukrainian front navigates its fourth year with no meaningful prospects for a ceasefire on the horizon.
Data Source: Intermodal