Her insurance companies suffered losses
British authorities plan to appeal to the European Union this week to strengthen control over the tankers of Russia’s “shadow fleet”. What exactly we are talking about, we can only guess for now. An anonymous source told Bloomberg that likely measures include more intensive exchange of information about ships carrying Russian oil. However, it may come to more stringent steps, for example, a ban on passage through the straits.
Several European governments are expected to approve this London-initiated plan at the European Political Community meeting on July 18 will be hosted by British Prime Minister Keir Starmer. Let us recall that at the end of June, Brussels approved the 14th package of sanctions against Russia, including restrictions on 27 vessels of the “shadow fleet”, which is used to circumvent the price ceiling for oil and petroleum products of $60 per barrel.
Meanwhile, as Bloomberg writes, only a small part of the more than a thousand vessels of the “shadow fleet” are currently under restrictions. The agency became aware of 40 such tankers: half of them belong to the state company Sovcomflot; eight have been idle near the ports of Vladivostok and Nakhodka for almost six months. The downtime is due to the fact that, firstly, sanctioned ships are more expensive to insure (insurance is provided by Russian, Turkish or Asian companies), and secondly, not every port will undertake to service them. Ultimately, the cost of transportation increases.
“It is not entirely clear what it means to “strengthen control,” says Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation. – No one has such a right to physically stop and check ships in international and even in their own territorial waters, this is already piracy. Russia will then have to send warships to accompany its tankers. Nobody needs this escalation. Maybe we are talking about limiting passage through the Baltic and Danish straits? In fact, this is the most obvious measure in this case, although its legitimacy is also questionable.”
At the same time, it is clear why the initiative comes from London, argues Yushkov. From an economic and financial point of view, the UK suffered quite a lot: in pre-sanction times, its insurance companies insured almost 90% of Russian oil transport by sea, and today, with the emergence and growth of the “shadow fleet”, this entire market is lost to them. That is, they continue to fight for him. The idea is this: if Russia is somehow forced to comply with the $60 per barrel price cap rule, then ship owners will again have to turn to British insurance houses, paying them for the service, rather than Russian or Asian insurers.
As the International Group of Mutual Insurance Clubs for Shipowners stated at the end of April, the presence of a “shadow fleet” in Russia indicates that the price ceiling for its oil is not working.