UK insurers are prohibited by the UK Treasury from providing insurance for: Vessels carrying Russian oil cargo after December 5, 2022.
This also means that vessels registered in European states or with P&I insurance from EU or UK based entities can no longer carry crude oil originating in Russia. To do. A caveat when transporting Russian-origin oil is that the oil must be sold to the buyer at or below the price set by the G7 members and Australia.The United States is also expected to join the move and join the insurance ban soon. Almost 90% of the world’s insurers would then shy away from Russian-linked oil tankers.
The idea of imposing a price cap is to make Russian crude available on the world market at a lower price to combat inflation, while at the same time reducing profit margins from oil going to Russia. Western governments also fear that a complete ban on Russian oil will cause oil prices to rise and hurt the global economy.
Russia has said it will not sell oil to any country enforcing price caps, and Russian oil buyers such as India and China have shown no indication that they will comply with the G7 plan.Samir Mandani, co-founder of TankerTrackers.com, said existing buyers of China, India and Turkey could buy Russian crude at deep discounts and sell refined crude derivatives on the global market. I expected it to be high.
This insurance ban in effect will initially apply only to crude oil. The scope of the ban will be expanded on February 5, 2023 to also include crude oil derivatives.