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Tankers carrying Russian oil through European waters will be asked to prove they have adequate accident insurance or face potential sanctions, according to officials briefed on a new scheme designed to tighten up restrictions on Moscow’s “dark fleet” of ageing vessels.
Under a new mechanism, maritime authorities will request insurance documentation from ships transiting the straits of Denmark, the Gulf of Finland and the straits between Sweden and Denmark, according to the officials. The scheme was agreed at the Joint Expeditionary Force meeting of north European nations in Tallinn on Monday,
Ships found to be sailing with insufficient insurance cover by participating coastal states — the UK, Denmark, Sweden, Poland, Finland and Estonia — could then be added to future sanctions lists. Ships that refuse to answer questions could also be added, according to one diplomat familiar with the plan.
G7 sanctions bar western insurers from offering cover to ships that breach the terms of the oil price cap, which seeks to stop Russia from selling oil above a fixed price of $60 a barrel for crude.
Russia has sought to evade the cap by building up access to its “dark fleet” of often ageing oil tankers, whose ownership, management and control are kept hidden. These vessels often either use insurers whose reliability is unknown, or hold no accident insurance at all.
Concerns about insurance cover has been rising, with coastal states fearing potentially huge clean-up bills in the event of an oil spill. The Financial Times and Denmark’s Danwatch reported in March that Ingosstrakh, a large Russian insurer, was providing shadow fleet vessels with insurance that could be voided if the shipments were breaching the cap.
Gathering details of underinsured ships will enable future sanctions listings. Since June, the EU sanctions legislation on Russia has included language that made “irregular and high-risk shipping practices” grounds for listings. According to the International Maritime Organization’s definitions, this includes “not maintaining adequate liability insurance”.
Some countries have already sought to extract more information from vessels. In October the UK said it would start challenging tankers transiting the English Channel about their insurance status. Since June, Estonia has requested documents from more than 200 vessels.
Shadow fleet tankers were involved in nearly 30 accidents during 2022 and 2023, according to evidence submitted by the Kyiv School of Economics and the State Capture non-profit to a UK select committee hearing on the effectiveness of the Russian sanctions regime.
According to the KSE, more than 90mn barrels of Russian oil — crude oil and products — passed through Northern European waters every month in the first half of 2024. About half of Russia’s seaborne oil exports come from the Baltic.
Vessels that have had sanctions imposed on them directly by the US, EU and UK have struggled to continue trading. On Monday the EU added an additional 52 vessels accused of being part of the shadow fleet to a list of ships that are banned from EU ports and banned from accessing services provided by EU companies.
“This targeted approach by the EU increases the cost for Russia to use such vessels,” the European Commission said in a statement, adding that it would “continue to closely monitor” how the fleet was seeking to evade western measures.
https://www.ft.com/content/8a485a6b-477e-4087-83f4-eca357082d71
