Stay informed with free updates
Just sign up for the Ukraine War myFT Digest, delivered straight to your inbox.
Tankers transporting Russian oil in European waters must have adequate accident insurance, according to officials briefed on new plans to tighten regulations against Russia’s “dark fleet” of aging vessels. They will be asked to prove that they have done so, or face sanctions.
Under the new mechanism, maritime authorities will require ships sailing in the Denmark Strait, the Gulf of Finland and the waters between Sweden and Denmark to submit insurance documents, officials said. The plan was agreed at a meeting of the Nordic countries’ Joint Expeditionary Forces held in Tallinn on Monday.
Vessels found to be operating with inadequate insurance by participating coastal states (UK, Denmark, Sweden, Poland, Finland and Estonia) may be added to future sanctions lists. A diplomat familiar with the plan said additional ships could be added, refusing to answer questions.
The G7 sanctions prevent Western insurers from providing insurance to ships that violate the terms of the oil price cap, which seeks to prevent Russia from selling oil above the fixed price of $60 per barrel. Forbidden.
Russia is trying to circumvent this cap by building access to a “dark fleet” of aging oil tankers whose ownership, management, and control remain hidden. These vessels often use insurance companies of unknown reliability or no accident insurance at all.
Latvia’s Foreign Minister Vaiva Braje said the measures “really target the shadow fleet and make their operations literally impossible.”
With 2,000 ships entering and exiting the Baltic Sea every day, “if something were to happen it would be a disaster,” she said. “This is not just Russia evading sanctions and circumventing oil price caps and smuggling oil, this is actually a real risk, a security risk, an environmental risk,” she said.
Braget said adding tankers to the sanctions list would require unanimity among the EU’s 27 countries, but if the insurance information was not satisfactory “that would definitely be evidence of a lack of integrity”. said.
Coastal states are concerned about the potential for huge cleanup costs in the event of an oil spill, raising concerns about insurance coverage. The Financial Times and Denmark’s Danwatch reported in March that large Russian insurance company Ingostraf was providing insurance for ships in the Shadow Fleet, which could be invalidated if the cargo exceeded the limit. It was reported.
Gathering details of underinsured vessels will enable the creation of future sanctions lists. Since June, the EU’s sanctions bill against Russia has included language that makes “irregular and high-risk shipping activities” grounds for listing. As defined by the International Maritime Organization, this includes “failure to maintain adequate liability insurance.”
Some countries are already trying to extract more information from ships. In October, Britain announced it would begin challenging the insurance status of tankers sailing through the English Channel. Since June, Estonia has requested documents from more than 200 ships.
Shadow Fleet tankers will be involved in nearly 30 accidents between 2022 and 2023, according to evidence submitted by Kyiv School of Economics and non-profit organization State Capture to the UK Select Committee hearing into the effectiveness of Russia’s sanctions regime. It was.
Recommended
According to KSE, more than 90 million barrels of Russian oil (crude oil and products) passed through Nordic waters every month in the first half of 2024. About half of Russia’s seaborne oil exports come from the Baltic Sea.
Vessels facing direct sanctions from the US, EU and UK are finding it difficult to continue trading. The EU on Monday added 52 ships accused of being part of the shadow fleet to a list of vessels banned from EU ports and barred from accessing services provided by EU companies.
“This targeted approach by the EU increases the costs for Russia to use these vessels,” the European Commission said in a statement, adding it “continues to closely monitor how the fleet attempts to circumvent Western measures.” We will monitor it,” he added.