- The EU price cap on Russian crude and its ban on Russian crude transported by sea were launched on Monday.
- Tankers have started piling up off the Turkish coast, as Ankara demands proof of insurance.
- Marine insurers have rejected the request, with Turkey asking for coverage that could expose them to a sanctions violation.
A cap on Russian oil prices by the European Union came into effect on Monday and is already causing disruption to shipping – tankers are piling up off the Turkish coast as Ankara demands documents proving ships are fully insured, according to Financial Times.
Stacking just comes as one EU price cap of Capped at $60 per barrel for Russian crude.
As 90% of global marine insurance is provided by a group largely based in Europe, the objective is to curb Russia’s oil revenues by limiting the cover that insurers can provide – this is because only vessels carrying goods priced below the EU ceiling can access western marine insurance.
But the Turkish government wants full insurance cover for the vessels – leading to a standoff and a bottleneck of 19 tankers waiting to cross Turkish waters, according to the FT which cites ship brokers, oil traders and security services. satellite tracking.
In a notice published Nov. 16, the Turkish government insists on documentation of marine insurance coverage “in all circumstances” – even when vessels breach sanctions “whether knowingly and intentionally or unknowingly and unintentionally”, according to a press release posted Monday by the Gard, a Norwegian marine insurer that covers half of the world’s merchant fleet.
These requirements go beyond the general information that is typically contained in a letter of entry for ships, so the International Group of P&I Clubs – protection and indemnity providers who represent a group of marine insurers – considered that he “should not issue such a letter” to ships.
“The issuance of a confirmation letter in these circumstances would expose the Club to a breach of sanctions under EU, UK and US law,” the statement said. The International Group of P&I Clubs is negotiating with the Turkish government.
This standoff has in turn affected traffic around Turkey’s Bosphorus and Dardanelles straits, as they link exports from Russia’s Black Sea ports to world markets. The first ship to arrive on the scene has been waiting since November 29, the FT reported.
Turkey’s Ministry of Transport and Infrastructure did not immediately respond to Insider’s request for comment sent outside normal business hours.
Moscow, for its part, has said it will not sell its crude oil below the $60-a-barrel level, with Russian Deputy Prime Minister Alexander Novak calling the price cap “interference” that could cause “a destabilization, shortages of energy resources and reduced investment” in the market, according to CASS, the public news agency.
“It can apply not only to oil but to other products in the market, and not just to Russia but also to other countries,” Novak said Sunday.
United States West Texas Intermediate oil futures rose 0.8% to $77.55 a barrel as of 10:14 p.m. ET on Monday, while international markets Brent crude oil futures were 0.8% higher at $83.36 a barrel.