Ceasefire or stalemate? Grain exports at risk in Black Sea deal

The Black Sea, a vital artery for global grain exports, has become a battleground where trade and geopolitics collide. In a high-stakes move, the United States has brokered a ceasefire with Russia and Ukraine to safeguard grain shipments. However, the deal is fragile—Russia has attached major conditions, including the lifting of sanctions and access to the Swift payment system. With billions of dollars in wheat and corn exports at stake, the world watches to see if this agreement can truly secure the Black Sea or if it will unravel under political pressure.

Grain shipments under attack

That is not the case now. As a result of the war between Russia and Ukraine, grain transports across the Black Sea are regularly under fire. At the beginning of March, another grain ship was hit in a Russian attack at the port city of Odessa. Agreements were made this week on the safety of shipping traffic in the Black Sea, the White House reports.

US and Ukraine agreement

“The United States and Ukraine have reached an agreement on guarantees of safe navigation, halting the use of force and preventing the use of merchant ships for military purposes in the Black Sea,” a statement from US President Trump said.

Russia’s demands for compliance

But there are quite a few snags to this ‘agreement’. After the White House released the statement, the Kremlin issued its own statement, which contained important conditions. Russia wants to regain partial access to the international payment system Swift. Blocking the Swift system for Russian banks is one of the EU sanctions after the invasion of Ukraine in 2022. The measure aims to weaken Russia’s economy.

This must end,” – the Kremlin says, referring to the sanctions imposed on Russian financial institutions and agricultural trade.

Russia wants Swift access

This must end, the Kremlin says. The sanctions imposed on the Russian agricultural bank Rosselkhozbank, but also on other financial organisations involved in the international trade in food products and fertilisers, must be lifted and they must be able to use Swift again.

Demands for sanctions relief

Furthermore, sanctions should be lifted for Russian companies that produce and export food and fertilisers. The Kremlin is also demanding that restrictions on the supply of agricultural machinery to Russia and other goods used for food production be lifted.

Shipping restrictions to end

In addition, Russian ships transporting food and fertilisers should no longer face sanctions and restrictions in ports. Only when these conditions are met can there be a ceasefire in the Black Sea as far as Russian President Vladimir Putin is concerned.

Ukraine has already indicated that it has no confidence in Russia, but that it will adhere to the ceasefire as agreed.”

Ukraine’s skepticism remains

Ukraine has already indicated that it has no confidence in Russia, but that it will adhere to the ceasefire as agreed. As far as President Volodymyr Zelensky is concerned, this can take effect immediately. However, Zelensky is less pleased with the US promise to help Russia improve market access for exports of Russian agricultural products.

US sees this as a start

The US government wants to quickly enforce peace between the 2 countries. The White House sees the Black Sea agreement as a first step. However, a number of conditions from the Russians must first be met. This also requires cooperation from the European Union. Swift’s head office is in Belgium and is therefore subject to EU law. And the EU applies its own sanctions against Russia, including exclusion from participation in international payment transactions.

EU unlikely to back down

The question is whether Brussels will want to make commitments to Russia about this in the short term. Currently, the EU is not considering lifting the sanctions. Moreover, according to the EU, the sanctions do not restrict trade in agricultural products between Russia and third countries. This was already left out when the sanctions were introduced in 2022, given the risks it would pose to global food security. Despite the EU sanctions, Russia is still the largest exporter of wheat in the world, and apparently it does not need Swift for that. But if the Kremlin and the EU stick to their current positions, the ‘agreement’ on the Black Sea will not make much difference for the time being.