Executive Summary
Beginning in early July 2026, Ukrainian drone forces have conducted an extended strike campaign against Russian shipping in the Sea of Azov. This inland sea connects Russia’s extensive inland river network to the Black Sea, and such attacks have provoked a tit-for-tat response from Russia against Ukrainian ports utilised to export the agricultural produce key to the Ukrainian economy. With the wider Black Sea region vital for the stability of the wheat and grain markets in particular, the shared impulse between Russia and Ukraine to target each other’s respective maritime trade routes may usher in a new era of volatility in the wheat markets with negative consequences for food-importing countries.
Introduction
Since the 6th of July, Ukraine has launched a concentrated medium-to-long-range aerial and naval drone strike campaign aimed at systematically degrading Russia’s civilian and export maritime traffic in the Sea of Azov, with the Ukrainian’s claiming to have struck 119 tankers from July 1st to July 20th (Trach et al, 2026). In response, Russia has suspended shipping through the Don-Azov canal and the wider Azov Sea whilst simultaneously pursuing its own attacks against Ukrainian port infrastructure and shipping destined for ports such as Odesa (Reuters, 2026a). Similar to the current Middle Eastern crisis, which has seen shipping become a key strategic target, the scope of the current war in Ukraine is beginning to widen into the maritime domain, with significant implications for both sides’ economies and the vital Black Sea grain trade.
Analysis: The Rationale for Strikes and the Impact on Grain Markets
The new Ukrainian anti-shipping campaign should be understood as an evolution of the existing long-range strike campaign aimed at isolating Crimea from the rest of Russia and transforming the occupation of the peninsula from a political victory into a long-term strategic liability and burden. Such actions have been pursued in the hopes that by seizing the initiative in Crimea, Ukraine can increase the political costs of pursuing the war for Russia whilst simultaneously putting it at a disadvantage in any future compromise relating to the Black Sea (Baev, 2026). In order to achieve this, Ukraine has, to notable success, focused its strike efforts on overland Russian traffic along the M14 highway as well as on fuel refineries and storage tanks within Crimea itself, leading to a state of emergency being implemented due to severe fuel shortages on the peninsula (Harward, 2026). With Russian overland logistics disrupted, supplies instead began to be shipped through the Sea of Azov, providing a target-rich environment which the Ukrainians have exploited (Karazy & Peleschuk, 2026).
The extended campaign against shipping therefore reflects the ongoing strategic shift in Ukraine’s strategy for victory, one that has prioritised targeting the Russian war economy in order to fracture elite and popular support (Jensen & Atalan, 2026). Apart from isolating Crimea, strikes on maritime shipping in the Sea of Azov also serve to choke off one of Russia’s main export routes for its agricultural products, with nearly a quarter of Russia’s wheat exports flowing through the Sea of Azov on their way to shallow-water ports beyond the Kerch Straits (Reuters, 2026). Russia has also followed the same strategic logic. In an attempt to choke off a key source of foreign earnings for Kyiv, Russia has hit 28 civilian vessels both in and around the Odesa region, through which 90% of Ukraine’s agricultural exports flow (Reuters, 2026b; Karazy & Peleschuk, 2026).
Given that the Black Sea remains the main route for both countries’ agricultural exports, the escalation seen in recent weeks has increased the risk of volatility in the world’s grain markets. The International Grain Council’s Grain and Oilseeds Index (GOI) wheat sub-index, for example, has already risen by 9% over the last month, reaching a 2-year peak (IGC, 2026). The volatility arises in particular because a bumper Black Sea wheat harvest from Ukraine and Russia was predicted to offset the smallest winter wheat crop in the US since 1965 (Pratt, 2026). However, the tit-for-tat strikes have undermined the ability of both countries to export the expected 62 million metric tonnes (MMT) of wheat needed to stabilise export supply and demand and make up for decreased US production (USDA, 2026b, p. 18). Russian wheat exports are expected to fall by 1/3 compared to July last year due to the Sea of Azov strikes, coming in at 1.5 MMT compared to 2.1 MMT last year (Muravskyi, 2026).
Meanwhile, Ukraine has lost an estimated 1/3 of its export capacity for grain due to Russian strikes, as the ballooning of war-risk insurance premiums from 0.2-0.3% to 3.5% makes calls at Ukrainian ports uneconomical for bulk carriers (Reuters, 2026b; Ifchor Galbraiths, 2026). However, most importantly, the strategic calculus behind each respective side’s attacks means that such disruption is unlikely to be short-lived. Both Ukraine and Russia seek to substitute stagnant ground offensives with extended attrition-strike campaigns against each other’s economies, doing so in order to force a compromise (Jensen & Atalan, 2026)
Combined with the disruptions in the Strait of Hormuz, there is thus a distinct possibility for a rally in the grain and wheat markets similar to that seen in 2022 during the early months of the war in Ukraine. This would deeply undermine the food security of the largely wheat-importing states of North Africa such as Egypt, whose society and stability remain deeply reliant on continued cheap wheat imports as well as the subsidisation of bread through the Tamween programme (Welsh, 2022). Furthermore, despite attempts to diversify its imports, Egypt in particular continues to be deeply reliant on wheat originating from Russia and Ukraine, with Russia supplying 35.8 MMT of wheat in the past 5 years alone (USDA, 2026a, p. 5).
Conclusion
The recent strikes therefore serve as a poignant reminder of the fragility of globalised food supply chains. The low cost of drones has made maritime area-denial possible for states and groups without a standing navy such as Ukraine or the Houthis, meaning the disruption of once reliable sources of grain and the inputs needed to produce it is unlikely to remain a solitary blip. As shipping becomes increasingly targeted across war zones, states and societies reliant on the seaborne import of key agricultural goods face the prospect of increased food insecurity and political turmoil.
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