Conflict in Ukraine is about to enter its 6th month. What started as a regional conflict in February is now a geopolitical game between the 2 rival powers. Every country is cautiously watching the events and the wider implications of this conflict.
Whatever Russia’s stated/unstated objectives about this conflict, one city has been constantly making headlines than the war itself. The historical Ukrainian city of “Odesa” is known for its rich cultural history. Odesa is the capital city of the Odesa oblast (region). The ports in Odesa oblast handle Ukrainian grain exports, the majority of which goes to the developing world. However, these ports are sitting idle since Feb 2022. In anticipation of a Russian invasion of Odesa through the sea, the Ukrainian navy mined the approach to the ports. Mining of the port, as well as control of the black sea by the Russian navy, halted commercial operations.
Without grain exports, some countries in Africa could face famine in the coming months. Understanding the gravity of the situation, a solution for grain shipments has been agreed upon via the mediation of the UN, and Turkey.
Russia never mentioned its intention of taking the Odesa oblast (region). Russian troops were indeed advancing towards Odesa but they were stopped by the Ukrainian army around the city of Mykolaiv. That was in Feb 2022. Today, Russia controls all the Ukrainian territories located on the Azov Sea and major portions of the Black Sea through previously annexed Crimea.
This begs a simple question. Why does Russia want to capture Odessa? And if they do manage to capture Odesa city as well as Odesa oblast, what will be the possible realignments in a larger geopolitical scenario?
As you can see in the picture, the Odesa oblast is situated on the Black sea coast. Alongside Dnipro river, it forms much of the sea-borne trade of Ukraine. Ukraine also shares the border with Romania through the Danube river and with Moldova through the Dnister River in Odesa oblast. The Danube is the 2nd longest river in Europe with a large river waterway that supported trade. Danube also connects the Black & the Baltic seas through a series of canals in the heart of Europe.
Odesa also offers the shortest route to the European hinterland for cargo transport coming from China. This geolocation of Odesa oblast makes it a logistics and trading hub.
Why does Russian want Odesa?
Many reasons to quote but to me, the major one is the need for a warm water port. Odesa oblast has many warm-water ports providing year-round access for sea-borne trade.
After the dissolution of the Soviet Union, Russia was left with a few warm water ports. Kaliningrad on the Baltic Sea, Murmansk on the Barents Sea, and Novorossiysk on the Azov Sea are the only big warm-water ports in Russia. Saint Petersburg, a major port on the Baltic sea, freezes during the winter. Though Kaliningrad is a warm-water port, it is located outside mainland Russia and only accessible through the territories of Belarus and Lithuania. Barents sea does not sit on a major shipping line thereby Murmansk port does not share a major part in the Russian trade. Even the port of Vladivostok in the eastern part of Russia freezes during the winter making them dependent on China for trade.
For a big country like Russia, the lack of warm water ports made Russia dependent on other countries for their sea-borne trade. It has resulted in an inability to project their power & influence around the globe. For example, they have been using Baltic seaports in Estonia (Tallinn), Lithuania (Klaipeda), and Latvia (Riga) for importing-exporting their goods. All the countries in the Baltic ocean have put a lot of sanctions on Russia after Feb 2022. Therefore, using these sea lanes is not going to be economical for Russia.
The capture of the Odesa will end the search for a strategically located warm water port.
Various Russian analysts stated that Ukraine becoming part of NATO could threaten Russian dominance in the Black sea region. Control of Odesa oblast will secure the Black sea fleet of the Russian Navy located in Crimea. This will also make a land corridor to the breakaway region of Transnistria (recognized as part of Moldova). With Turkey and Russia already on friendly terms, Russia can easily expand the capacity of the Black sea fleet and project power in the territories in Libya, Syria, and Africa.
Complete control of Odesa will alter entire trade & supply routes in the world. With Ukraine, Russian, and Belarus using the same railway gauge systems, ports around Odesa can be operational without much work. If such a scenario does exist, what will be the trade implications for other regions? Let’s discuss them one by one.
Baltic countries (Estonia, Latvia, Lithuania)
As stated earlier, warm water ports in Baltic countries form a huge part of Russia trade. Baltic countries are still using the same soviet railway gauge as Russia despite being part of the European Union. This helped in exporting Russian coal, timber, and other minerals to Europe. However, post-Feb 2022, these trade relationships cease to exist and they are highly unlikely to improve in the future. All the countries in the Baltic sea are members of the European Union and most of them are also part of NATO. Russia will try to avoid using these ports in changing geopolitical scenarios.
With Russia shifting focus from Europe to Asia, the ports in Baltic countries will not be much useful for Russia. Much of this traffic might be routed to Odesa or other seaports closer to Asian markets. Not just ports, the reduction in trade between Europe & Russia will also make the railway system in Baltic countries virtually useless. There have been already indications of losses suffered by logistics companies in the Baltic countries.
Russia will also use the Northwest route to transfer much of the goods in the future directly to western markets thereby bypassing much of the Baltic sea. Port in Murmansk can take advantage of ice melting to shorten distance between Asia & Europe.
Russia is a supplier of gas, oil, and other commodities to many countries in Southern Europe. Despite sanctions, not many countries in & out of the European Union in this region are against maintaining trade relationships with Russia. Much of the trade in this region happens through Danube river waterway system.
The capture of Odesa will give Russia the possibility to access the Danube river system. Russia can negotiate special trading rights through the Danube river to trade with these Russia-friendly countries. For these countries, it will also open a wider trade route through the proposed Eurasian canal, and North-South transportation corridor to emerging markets in Asia, and Africa.
Eurasia, Central Asia, and Eurasian Canal
As seen in the picture, Russia has the geographical advantage of locating on both the Caspian and Black sea. It also connects both of these seas through Volga-Don canal as shown in the picture. This canal was also used to transfer cargo from interior Russia through Volga river to the Black Sea and vice-versa. But due to size and capacity restrictions, this canal did not live upto its potential.
In 1990s, there was a plan to create a slightly larger Eurasian Canal. Environmental issues and the cost factor did not result in the construction of this canal. With Russia shifting its trade focus from west to east, Eurasian canal can be revived. Along with the Russian ports on Black sea and access to Danube waterway, this canal can instrumental in connecting Central Asia with European markets.
Iran & North-South Transportation Corridor
In my view, Iran will be the major beneficiary of the changing geopolitical realignment. Many years ago, India proposed a North-South transportation corridor as an alternative route to the Suez Canal to transfer goods between Asia & Europe. As you can see in this picture, goods were to be transported through sea and rail routes through Iran, Azerbaijan, and Russia. The project did not find takers for many years as Russia was mainly focused on the trade with the west.
Recently, this corridor completed its first trial run and started commercial services. This new route bypassing Suez canal shortens the distance & reduces the cost. With Russia now completely aiming to decouple from west and focusing on east, more investments into this corridor will make it efficient and profitable. Not just India, many countries trading with Russia in the middle-east, Africa, and Asia could use this corridor to shorten time & save money.
I like to remind my readers that I condemn any type of violence and war is never a wise way to settle disputes. But if we look from an analytical point of view, Russia has a lot of gain by taking control of Odesa. With their deteriorating trade relationship with European Union, they have to find new markets and new trade routes. Capture & control of Odesa oblast will help in establishing all such goals.