Status: 06.12.2022 4:46 p.m
The EU oil price cap against Russia has led to a tanker backlog in Turkish waters. An energy expert also warns of a catastrophe risk from a “shadow fleet” in Russia – with ships that are poorly insured or not insured at all.
It remains to be seen how the EU and G7 oil sanctions against Russia, which came into force on Monday, will actually work – but the price cap is already showing the first side effects.
Since Monday, a tanker jam has formed on the Turkish straits between the Black Sea and the Mediterranean. According to a shipping industry insider told the news outlet Reuters At least 20 oil tankers are currently waiting in Turkish waters for passage.
The reason for this is the requirement of the sanctions that Western insurers can only insure ships with Russian oil if it sells for no more than $60 a barrel (159 litres). According to several representatives of the oil industry, against this background the Turkish authorities are demanding new evidence of valid insurance cover, for example for oil leaks or collisions, writes the “Financial Times”. According to information from the insurance industry, the required documentation went far beyond the usual information requirements.
Impact on global oil trade
Much of the affected oil comes from Kazakhstan, which reaches Russian ports via pipelines and is unaffected by the sanctions, according to the British financial daily. So the tanker backlog suggests that the oil price cap is also impacting global supplies of non-Russian oil. Every day, millions of barrels of oil are transported from Russian ports through the narrow Turkish straits on the Bosphorus to the Sea of Marmara and then on through the Dardanelles to the Mediterranean Sea. A US official told the Financial Times that the Turkish side had expressed its concern about the delays with Britain.
More delays are expected in the coming days as operators scramble to get insurance under the G7’s new price cap, the industry insider told Reuters.
Increased risk of an oil spill?
With the world’s major shipping and insurance companies based in the G7 countries, the price cap could make it difficult for Russia to sell its oil at a higher price. In order to circumvent the sanctions, Russia is said to have already built up a “shadow fleet” of more than 100 oil tankers that operate with insurance from non-Western companies or with no insurance at all.
According to Russia and energy expert Adnan Vatansever, the use of these ships increases the risk of an environmental disaster at sea. “The risk of a tanker accident is greater than it has been in a long time,” the head of the Russia Institute at London’s King’s College told Der Spiegel. Most of the Shadow Fleet ships are “quite old”. “And while the Western insurance companies have the condition of the tankers checked carefully, I doubt that this is as important to the Russian insurers,” says the expert.