Russian coal exports face vessel shortage after Ukraine's attacks

Since the beginning of July, the number of vessels capable of exporting Russian coal from the Black Sea has dropped by 21%, compared to the previous month, and by 28% compared to the same period last year. This reduction in shipping capacity has left only 97 bulk carriers still transporting cargo. Insurance companies have ceased providing coverage for vessels entering the Azov-Black Sea basin, prompting medium- and large-tonnage bulk carriers to seek alternative shipping routes.

Smaller vessels, which cannot navigate these waters, have already been laid up in cold storage until the situation improves. Consequently, Russian coal exporters have failed to finalize a single Black Sea shipment deal in the past week. Meanwhile, fuel shipping capacity in the Sea of Japan has also dwindled. The increase in demand for Russian coal in South Korea has pushed Panamax freight rates in the region up by 5% to 10%, depending on the route.

Freight rates to India and China have also risen, reaching $21.80-$23.80 per ton for Indian routes, $12.50 per ton for northern China, and $11.50 per ton for South Korea. The scarcity of vessels is unlikely to cause a general coal shortage in Asia, but it could strain the economics of Russian coal exports and result in localized shipping delays.

Oleg Yemelchenkov, a junior director at Expert RA, explained that the shortage of vessels could raise the price of Russian coal for buyers by $10-$15 per ton. Maksim Shaposhnikov, an adviser to the Industrial Code investment fund, added that higher freight costs will negatively impact the profitability of Russian exporters and potentially decrease coal export volumes.

According to Kpler, Russia's seaborne coal exports totaled 11.45 million metric tons in July, marking an 11.2% increase from July 2025 and a 7.9% rise from June. Moscow has warned that navigation in its part of the Black Sea has become hazardous due to escalated attacks by Ukraine on Russia-linked vessels in the region. Between July 8 and July 20, at least 124 Russia-linked vessels, including 89 tankers, were struck in the Black Sea and the Sea of Azov, according to Ukraine's General Staff.