Dec 12, 2022
Russian Ship Insurer Says It Won't Fill Void Caused by Sanctions
, Bloomberg News
(Bloomberg) -- A top Russian insurer of oil tankers against risks including collisions and spills said it won’t fill any void that’s created by sanctions targeting the nation’s petroleum exports.
Group of Seven sanctions that started on Dec. 5 prohibit companies from providing insurance related to Russian oil if the cargo is purchased at a price of more than $60 a barrel.
With the vast majority of cover arranged through companies in G-7 countries, that’s created an unanswered question about how tankers moving the nation’s oil will get insurance if international firms don’t do so. Ingosstrakh Insurance Co., a so-called protection and indemnity underwriter, said it won’t ramp up.
“Ingosstrakh does not plan to expand its P&I portfolio by offering P&I policies to new clients, who may lose coverage from international P&I clubs after new restrictions came into force on December 5,” the firm said in a statement.
The comments are more direct than remarks Ingosstrakh previously gave about whether it would fill any void left by western insurers.
Russia previously said it may cooperate with buyer states to provide insurance for the vessels. It’s unclear whether this approach has been tried already.
Ingosstrakh said previously that its entire P&I portfolio, including coverage of the domestic river fleet, bunker and cabotage vessels, amounts to less than 1% of all the money it receives in order to underwrite risks — known as its total written premiums.
The firm also said it wouldn’t provide ad-hoc cover to a backlog of tankers that built up on the Turkish straits as Ankara sought assurances they were insured for transit of the key waterways.
“We are not willing and will not provide short-term P&I coverage for vessels caught up by the new Turkish regulations at the mouth of the Bosphorus,” the Russian company said in a statement.
The impasse appeared to have been resolved on Monday. Multiple tankers have navigated the straits since over the weekend, suggesting Turkey is now satisfied the ships are covered.
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