January 27, 2023

A senior Kremlin official has admitted that Western sanctions are taking their toll on Russia, after they were imposed over Vladimir Putin’s invasion of Ukraine.

Transport Minister Vitaly Savelyev admitted that the crushing measures had “virtually broken” Russia’s logistics, according to the Interfax news agency.

He said Western sanctions are forcing Moscow to seek “new logistics corridors” such as the North-South international transport corridor, which runs between India, Iran, Afghanistan, Azerbaijan, Russia, Central Asia and Europe.

“Those sanctions that were imposed on the Russian Federation today have practically broken all logistics in our country,” Savelyev said on Saturday, adding: “We are forced to look for new logistics corridors.”

Before President Vladimir Putin launched his invasion of Ukraine on February 24, Russian maritime trade bound for Asia normally passed through the Suez Canal.

This meant that their trade routes took their ships through the Baltic, North and Mediterranean Seas, or through the Black Sea and the Bosphorus (the Strait of Istanbul), before passing through the canal to the Red Sea beyond.

However, Western sanctions prohibiting trade with Russia and Russian companies have essentially closed the standard route to ships from Moscow, and Savelyev says they are looking for alternatives.

Ukraine war Western sanctions have practically broken Russias logistics trade

Transport Minister Vitaly Savelyev admitted on Saturday that the crushing measures had “virtually broken” Russia’s logistics, according to the Interfax news agency. Pictured: Saveliev attends a Victory Day military parade, marking the 77th anniversary of the victory over Nazi Germany in World War II, on Red Square in central Moscow on May 9.

The Kremlin official said there are three key Russian ports on the Caspian Sea that could be involved in the North-South route being considered: the port of Olya, the port of Astrakhan and the port of Makhachkala, according to Interfax.

However, he hinted that these ports do not have the capacity to cope with the level of trade that Russia previously enjoyed using other routes.

“Because of the fact that we are considering this direction, of course, these are not only ports, but also port access, bridges and highways, we should not have bottlenecks that do not allow us to reorganize,” he told reporters.

There would be other problems that Russia would also have to deal with when it comes to the North-South route, namely crossing Iran.

The goods would have to be unloaded in northern Iran, transported south through the country and then reloaded onto another ship at the southern port of Bandar Abbas before continuing on to India.

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Russia has also explored shipping goods overland through Kremlin-friendly Azerbaijan and into Iran, as an alternative to shipping them through the Caspian Sea.

Russia’s trade with Asia is now more vital than ever to its economy. In 2021, Russia exported more than 42 percent of its goods by value to Asia, compared with 49 percent to European markets, according to Briefing on Russia.

As a result of Western sanctions, the balance has shifted, with Russia relying heavily on its relationships with countries like India and China to support its economy.

Savelyev’s comments mark a rare acknowledgment of the detrimental impact Western sanctions are having on Russia, which has become increasingly isolated.

In an attempt to break Western resolve, the Kremlin retaliated with its own sanctions, cutting gas supplies to countries including Poland, Bulgaria and, on Saturday, Finland last month.

But this has not been enough for sanctions to be lifted, and Western countries remain steadfast in their commitment to support Ukraine, limit funds available to Moscow’s armies and punish Putin for his brutal invasion of a sovereign nation.

Finland said it was prepared for the Russian gas flows to be cut off. On Wednesday it applied with its Nordic neighbor Sweden to join the NATO military alliance, though that faces resistance from NATO member Turkey.

Bulgaria and Poland also said they had planned the cut and were reducing their reliance on Russian gas.

Pictured: Containers at the Black Sea port of Constanta on May 11, 2022 in Constanta, Romania

In Russia, meanwhile, sanctions have meant Western companies have left the country in droves and hundreds of Russian oligarchs with ties to Putin and the Kremlin have had their assets frozen or seized.

While the ruble has rallied in recent weeks after initially falling to incredible lows, it has required state intervention, which some analysts have said is unsustainable, and Moscow trying to force Western nations to pay for their Russian gas in the coin.

In another frank admission from a Russian official last month, the head of the Central Bank of Russia (CBR), Elvira Nabiullina, said she had to do everything in her power to stop a huge run on the banking system.

“The sanctions imposed against Russia affected the situation in the financial sector, stimulated the demand for foreign exchange and caused massive sales of financial assets, an outflow of cash from banks and a growing demand for goods,” he said in April.

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However, Russia is not the only country that has suffered logistical problems since the invasion began.

Dozens of container ships are blocked in Ukrainian ports that are surrounded by Russian forces, choking off exports of wheat, sunflower oil and other food products, as well as fertilizers for crops.

Fears about global food shortages as the war rages on are fueling calls for a safe corridor for ships to get out of the Black Sea, but the logistics are daunting and would need Russian cooperation.

That has already pushed up prices and the United Nations warns that millions of people are at risk of malnutrition or even famine.

Fears are driving calls for a safe corridor for ships to leave the Black Sea, but the logistics are daunting and would need Russian cooperation.

Before President Vladimir Putin launched his invasion of Ukraine on February 24, Russian maritime trade bound for Asia normally passed through the Suez Canal. Now Russia has to find alternative routes due to Western sanctions. Pictured: The Panama-flagged container ship MV ‘Ever Given’ sailing near a felucca along Egypt’s Suez Canal in 2021 (file photo)

‘Stop blockading the ports on the Black Sea. Allow the free flow of ships, trains and trucks carrying food from Ukraine,” US Secretary of State Antony Blinken told a UN Security Council meeting on Thursday.

“About 400 million people around the world depend on Ukraine’s grain supply,” Serhii Dvornyk, a member of Ukraine’s mission to the UN, told the meeting.

“We demand that Russia stop illicit grain theft, unblock Ukraine’s seaports, restore freedom of navigation and allow commercial ships to pass,” he said.

Russia denies the claims, but such assurances are not going to be put to the test by shipping companies hoping to take ships to and from Ukraine.

A Western diplomatic source told the AFP news agency that around 20 million tons of grain is currently blocked in Ukraine and trying to ship such amounts by truck or train is not feasible.

“In concert with the UN, we are working to create safe conduct for Ukrainian ships carrying grain,” Turkish Foreign Minister Mevlut Cavusoglu said in New York on Wednesday.

Turkey is trying to mediate with Russian President Vladimir Putin, but Francois Heisbourg of the Paris-based Foundation for Strategic Research said broader support is needed for a UN resolution that would force Moscow to accept a naval broker.

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“The ones who should push on the food blockade issue are the big importers in Asia (eg Indonesia), MENA (eg Egypt) and West Africa,” he wrote Thursday on Twitter, referring to the Middle East and West Africa. North.

James Stavridis, the US Navy admiral who was NATO’s Supreme Allied Commander Europe from 2009 to 2013, said the solution could be escorted convoys like during Operation Earnest Will, which protected tankers of the Gulf during the Iran-Iraq war in the 1980s.

But in a strategic review published by Bloomberg this month, he acknowledged that Putin might insist on trying to “separate the Ukrainian economy from global markets.”

“We would have to have an agreement,” the Western diplomat said.

Even with an agreement, protecting ships in the corridor from mines laid by Russian and Ukrainian forces could prove difficult and time consuming.

“There is currently very little maritime traffic in the Black Sea, partly because mines have been found,” said Capt. Eric Lavault, a spokesman for the French Navy.

“We don’t know the mine maps… It’s not clear what has been done in Odessa, so we would have to send an anti-mine force,” he said.

That could take days or even weeks. It’s like building a road, so boats can pass each other, and parking lots, and you have to clear them all.’

That would also require air and naval support, as they would be operating in a war zone, regardless of whether or not they had a UN mandate.

And it remains uncertain whether Ukraine would agree to remove its mines from Odessa and other ports, even if Russian forces agreed to remove theirs.

“If any passage is arranged, it can be used by the aggressive side,” said Deniz Kutluk, a retired admiral in the Turkish Navy, which controls access to the Black Sea through the Bosporus under the 1936 Montreux Convention.

Ukrainian President Volodymyr Zelensky may first insist on receiving more advanced weapons for coastal defense from Western allies, raising the risk of further retaliation from Moscow.

And even if all the mines were removed, “you can put the mines back very quickly,” Lavault said.

‘We don’t know how much capacity they have left, but to drop mines you only need a fishing boat and two metal poles and in one night the road is blocked.’