Why is US Engagement in the Black Sea Region Important for the US and Global Energy Supply Chains?

Elene Meurmishvili

This Photo by Unknown Author is licensed under CC BY

The energy trade route regions that the world has long depended on are showing serious vulnerabilities. In 2024, Suez Canal trade dropped by 50 percent from a year earlier, and trade through the Panama Canal fell by 32 percent. This had a tremendous impact on US and world energy supply chains. A region that often gets overlooked is the Black Sea, which supplies the world with Caspian oil, and is surrounded by NATO and EU allies. The United States must engage more in the black sea region to shift away from rival dominated energy supplies and prevent the same rivals dominating the logistics.

The Black Sea region is located in Eastern Europe and West Asia. Countries on the east side of the Black Sea also border the Caspian Sea. The region’s Baku-Tbilisi-Ceyhan pipeline delivers Caspian oil to the Mediterranean, bypassing Russia and Iran. This pipeline was predicted to bring 1 million barrels of oil per day from the Caspian Sea to international markets, when it opened in 2005. A former special advisor to President Clinton on Caspian energy issues, Ambassador Richard Morningstar, pointed out that many US policymakers realized that the Azerbaijani port of Baku and the Turkish port of Ceyhan would advance numerous US international and regional goals. For example, through this pipeline in the Black Sea region, Caspian energy resources that are landlocked will be available to the international market. Ensuring US cooperation and engagement in the region will ensure that Russia, Iran, and China don’t dominate pipelines from the Caspian region, and affect the global supply.

Aside from pipelines, energy is often transported via tanker vessels, which is why the maritime trade locations and their accessibility are so crucial to energy supply chains. Currently, the most important marine trade routes for different commodities, not just energy, are highly unstable. The Review of Maritime Transport 2024 from UN Trade and Development (UNCTAD) reveals that critical chokepoints - such as the Panama Canal (connecting the Pacific and Atlantic Oceans), the Red Sea and the Suez Canal (linking the Mediterranean Sea to the Indian Ocean via the Arabian Peninsula), and the Black Sea (an important hub for grain exports) - are under severe strain. Especially the Panama and Suez Canal, that experienced a traffic drop over 50% in mid-2024 caused by the climate-induced low water levels in the Panama Canal and the conflict outbreak in the Red Sea Region, which affected the Suez Canal.

An interesting question is why would US care about another politically unstable region, the Black Sea, in terms of its energy trade policies? A critical reader would point out that the region is too unstable to matter for the United States’ energy supply. Well, this is exactly what makes US engagement and involvement more necessary. If the US shows disinterest in the region, rivals like China and Russia will dominate the logistics. Think of Central Asia. United States was hesitant with its strategic partnership with Central Asia due to corruption, and governance concerns. Instead, China stepped into the regions, and invested in their infrastructure sector. In September 2022, the United States tried to reengage in the region through the Economic Resilience in Central Asia Initiative, after realizing significant economic interests were lost. The initiative centered around trade routes, private sector, and education.  At this point, China’s investment in the region was so large that US presence is faded and remains small compared to China’s.

Many critics might point out that another reason why the region is not of great importance to the United States is that it heavily depends on oil imports from Canada and Mexico, not on any specific country in the Black Sea region. While those critics, would be right, one can’t forget about imports from Saudi Arabia, Iraq, Brazil, and of course exports to China, the Netherlands, and Japan. The United States is heavily engaged in the global energy trade and should pay attention to disruptions and trends in the global trade flow.

The Black Sea links Europe, Central Asia, and the Middle East, making it an important section of the global trade flow. There are a few current initiatives for more security in the region, such as the EU’s new strategic approach to the region. Their strategy focuses establishing a Black Sea Maritime Security Hub to protect infrastructure, improve safety, and enhance regional cooperation in various aspects including environmental protection. Another part of this strategy is a “Connectivity Agenda” that expands transport, digital and energy links to Europe and Central Asia, while promoting the region’s sustainable growth. Geography isn’t the only reason why the region is important.

Unlike the Suez Canal, which is under the sovereign control of Egypt, The Black Sea maritime routes are not under sovereign control of any one country. Turkey has control over the Bosporus and Dardanelles Straits through Montreux Convention, which means that it may regulate passage of naval and commercial vessels. Turkey may also impose restrictions on warships, and wartime access to these straits. But regardless, no neighboring country controls the body of water. The trade flows are not dominated by one actor but all of those who border it. Turkey’s importance in the region shouldn’t be underscored. Turkey is a NATO member and is very committed to economic partnerships with the West, this was proven by their recent termination of retaliatory tariffs imposed in 2018 on the US.

The United States cannot lose its partnership with the Black Sea Region to its rivals. Increased support for Black Sea maritime security initiatives could go a long way, as well as expanding financial investment and political support for the region, especially since the previous important trade routes have experienced significant difficulties. Washington should treat the Black Sea Region as a strategic frontier and reconsider its policies and tariffs towards the region.