Oil tankers jam off Turkey after price cap on Russian oil: FT
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Around 19 crude oil tankers are waiting to cross Turkish waters after the price cap on Russian oil took effect on Monday.
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Around 19 crude oil tankers were waiting to cross Turkish waters on Monday (Getty Images)
Turkish waters are witnessing a traffic jam of oil tankers after the West imposed a price cap on Russian oil that came into effect on Monday, with Turkish authorities requesting insurers to promise that vessels navigating its straits were fully covered, the Financial Times reported.
Under EU sanctions, tankers loading Russian crude oil are barred from accessing Western maritime insurance unless the oil is sold under the G7’s price cap of $60 a barrel.
The Financial Times cited four oil industry executives as saying that Turkish authorities had demanded new proof of insurance in light of the price cap.
The newspaper said, citing ship brokers, oil traders, and satellite tracking services, that around 19 crude oil tankers were waiting to cross Turkish waters on Monday, dropping anchors near the Bosphorus and Dardanelles, the two straits linking Russia’s Black Sea ports to international markets.
The first tanker arrived on November 29 and has been ever waiting since, the report quoted a ship broker who asked not to be named as saying.
According to the Financial Times, "Ankara has asked all crude tankers passing through the Turkish straits to provide letters from their protection and indemnity providers, known as P&I Clubs, confirming that insurance cover would remain in place to cover incidents such as oil spills and collisions."
Nonetheless, P&I Clubs explained in a statement that it was not possible to guarantee cover in the case of a sanctions breach.
The newspaper quoted Nick Shaw, the group’s chief executive, that P&I Clubs was in "ongoing constructive discussions with the relevant authorities to try and resolve the situation."
An informed source indicated that vessels with insurance from western providers were the ones stuck since, for oil barrels sold above 60$, companies based in the countries involved in the cap are prohibited from providing services of maritime transport like insurance.
Read more: Peskov responds to Scholz, Macron; price cap won't affect operation
