The UK treasury has confirmed it will not allow any British insurers to cover ships carrying Russian oil from December 5.
By December 5, tanker owners that fly any European Union flag or carry P&I insurance from an EU or UK club can no longer have crude oil onboard that originated in Russia, unless Russia has sold the crude to the buyer at or under a price cap pushed for by G7 members. The US is expected to join the insurance ban shortly meaning more than 90% of the world’s insurers will shun Russian-linked crude tanker business from next month.
“We continue to stand by Ukraine in the face of Putin’s barbaric and illegal invasion,” UK finance minister Jeremy Hunt said, adding: “We’ve banned the import of Russian oil into the UK and are making good progress on phasing it out completely. This new measure continues to turn the screws on Putin’s war machine, making it even tougher for him to profiteer from his illegal war.”
The tanker ban legislation that takes effect on December 5 for the UK, G7 and the EU will initially only apply to crude oil exports, but from February 5 will be extended to cover refined products.
Looking at the upcoming tanker ban, Samir Madani, co-founder of TankerTrackers.com, suggested the incoming price cap will aim to get as much Russian crude oil to the global market in order to fight inflation, while limiting the amount of profit the Russian president can use in his war against Ukraine. Existing buyers – China, India and Turkey – will ramp up purchases of heavily discounted Russian crude and sell the refined product back to the West, Madani predicted.
TankerTrackers.com is an independent online service that tracks and reports shipments of crude oil in several geographical and geopolitical points of interest. Madani has been tracking sanctioned oil shipments for years and is considered one of the world’s foremost experts on the illegal tanker trades.
“This financial incentive will make the price cap very attractive and lucrative for the remaining importers, and even if they don’t officially side with the G7 price cap, they [China, India and Turkey] are in effect enforcing it by buying at a massive discount,” Madani wrote in a widely read thread on Twitter yesterday.