Russia and Ukraine have agreed to stop the fight in the Black Sea in a US-brokered deal, but it remains unclear whether the agreement will come into effect anytime soon.
Russia had a big warning. Comply with the transaction only after various restrictions have been removed from agricultural exports. Penalties are imposed by the US and the European Union, and removing them is a difficult process.
It appears that Kyiv and Moscow also have different interpretations of the contract announced Tuesday. Russia has framed it as a way to revive unsupported transactions in 2022 and as a way to control commercial transport through the sea to some extent. However, Kiev insisted that it would not allow the Russian Navy to return to the western Black Sea, which is used on the main Seaborne export routes.
Emphasizing the distrust between the two countries, each accusing the others of violating the ceasefire on Wednesday. Ukraine reported an attack on the port city of Mykolife, but Moscow said it had fired down two Ukrainian drones in the Black Sea.
The Russian conditions emphasized that ending the war would not be in a hurry. With the sympathetic regime in the White House and its forces dominating on the battlefield, Moscow is determined to get as many concessions as possible.
What were the conditions in Russia?
The Kremlin said it would not agree to the maritime ceasefire agreement unless the National Agricultural Bank and other financial institutions involved in the food and fertilizer trade are reconnected to an international payment system known as Swift.
The system is headquartered in Belgium. This means that the US needs to push European regulators to press against them. In a statement on the transaction, the White House pledged that “it will help restore access to the global market for exporting agriculture and fertilizers in Russia.”
Moscow also said Western companies hope to restore delivery of agricultural equipment to Russia and remove sanctions against companies, vessels and insurance companies involved in the food and fertilizer trade.
According to Russia, grain and fertilizer exports reached $45 billion in 2023. Even during the war, Russia exports record amounts of grain and fertilizer, said Andrei Sizov, director of Sobekon, a Russian consultant.
Aleksandr Kolyandr, a Russian analyst at the European Centre for Policy Analysis, said that if sanctions are lifted against Russian state banks, the Kremlin could use them for other transactions.
“A moment when there is a bank that has no sanctions, you can use it for whatever you like,” Kolyandr said. “It could be a tool to break the sanctions regime,” he said, but “it's much easier to keep an eye on just one bank.”
What is Ukraine's position?
Kiev said he would follow a maritime ceasefire, but remains skeptical of Moscow's intentions.
Ukrainian President Volodymyr Zelensky said on Tuesday that Russia's demands for Russian sanctions indicated “they are already trying to distort the agreement.”
Zelensky also said the US commitment to help Russia strengthen agricultural exports is “weakening position and weakening sanctions.”
Given the Russian demands and the different interpretations that both parties have about the contract, it remains unclear how Ukraine will benefit. Experts pointed out that the White House has not said whether the deal will protect Ukrainian ports from Russian attacks and allow for the reopening of Mykolav and Herson ports.
Kiev also has little interest in returning to the 2022 non-support agreement that Russia wants to revive. The agreement allowed Ukraine to export grain through the agreed Black Sea Corridor and Russia, inspecting all commercial vessels to prevent weapons from being carried.
But Andrii Klymenko, head of the Black Sea Strategy Institute, said the inspections had very slow exports and the routes were unprofitable.
After Russia retreated from the deal, Ukraine secured its own transport corridor by ousting the Russian navy out of the western part of the Black Sea. This allowed sea-borne grain exports to return to near-ring levels.
What might happen next?
Last week, Russian President Vladimir V. Putin agreed to halt attacks on Ukraine's energy infrastructure for 30 days. Ukraine, which has supported a full immediate ceasefire, followed suit. On Tuesday, the two countries reaffirmed their commitment to enacting a 30-day moratorium on energy strikes.
On Tuesday, the Kremlin released a list of facilities that fall under the moratorium. The list includes oil refineries, pipelines and storage facilities, nuclear power plants, hydroelectric dams and energy transfer infrastructure.
However, the two sides have been exchanging allegations of attacks against each other's power grid over the past week, and it was unclear whether they would soon find a common position. The situation of the energy ceasefire highlighted how Moscow is trying to drag the talks into, portraying itself as open to negotiations but not making any major concessions.
Ukrainian Defense Minister Rustem Umerov said on Tuesday that “additional technical consultations” should be held as soon as possible to effectively implement the energy and maritime agreement.
