A surge in military attacks on shipping and ports in the Black Sea by Russia and Ukraine has severely disrupted global grain and oil supplies, driving up shipping and war insurance costs. Concurrently, widespread droughts in the Northern Hemisphere have severely impacted wheat crops, with the USDA estimating an 11% decline in production among major exporters. These combined factors have pushed global wheat prices nearly 25% higher than January 2026 levels, raising concerns over food security in Africa and the Middle East.
Black Sea shipping disruptions
- ▪Dirty tanker loadings from Russian Black Sea and Sea of Azov ports fell 62% in the final two weeks of July 2026, averaging 0.98 million barrels per day.
- ▪Since July 22, 2026, no foreign commercial cargo vessel has entered or departed the Ukrainian ports of Odesa, Chornomorsk, or Pivdennyi.
- ▪Kazakh oil exports through the Caspian Pipeline Consortium terminal fell 62% in late July 2026 due to Ukrainian attacks.
- ▪Ukraine recorded 35 attacks on vessels in port, 22 at sea, and 67 strikes on port facilities in July 2026.
Global wheat production decline
- ▪Russia and Ukraine accounted for approximately 32% of the global wheat trade in the 2025/26 marketing year.
- ▪The U.S. Department of Agriculture estimates combined wheat production for the top seven global exporters will decline 11% for the 2026/27 marketing year.
Wheat price increases
- ▪Offered prices for thermal coal imports in Turkey rose from below $100 per tonne in mid-July 2026 to around $135 per tonne by August 2026.
- ▪Global wheat prices increased almost 25% above their January 2026 levels by August 2026, reaching their highest levels in two years.
Market volatility trends
- ▪War insurance costs for port calls to Black Sea terminals rose to as much as 2% of the ship's value in August 2026.
- ▪Average daily Black Sea oil tanker costs jumped to over $300,000 a day in August 2026 from just over $200,000 a day in late July 2026.
Drought impacts on exporters
- ▪Total United States wheat production is estimated to fall by 26% and exports to decline by almost 15% in the 2026/27 marketing year.
- ▪Persistent drought conditions in the southern United States plains are estimated to cut hard red winter wheat production by 29% in 2026.
Fertilizer supply constraints
- ▪High fertilizer costs and canola price attractiveness contributed to a decline in Canadian wheat plantings for the 2026/27 crop year.
- ▪Continued Black Sea disruptions threaten Russian fertilizer exports, including urea, nitrogen fertilizers, phosphate, and potash.
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