The UK has insured around a third of all Russian seaborne oil shipments since the start of the Ukraine conflict despite sanctions, according to a report by the Centre for Research on Energy and Clean Air (CREA).
British firms have covered over £102 billion ($130 billion) worth of Russian oil between March 2022 and November 2023, the CREA revealed in its analysis published last week.
“Despite the EU/G7 countries’ sanctions on Russian oil, a majority of vessels carrying Russian oil and oil products are owned and/or insured in the EU and G7 countries,” the report reads.
The price cap on Russian seaborne oil exports was introduced by the EU and G7 countries in December 2022 and was followed by similar restrictions on exports of Russian petroleum products. Under the measure, Western firms are banned from providing insurance and other services on shipments of Russian crude, unless the cargo is purchased at or below $60 per barrel, a level below the current market price.
The report found that around 33% of all seaborne exports of Russian oil and petroleum products have been transported on tankers insured in the UK since the sanctions took effect until early November 2023.
It is not illegal to transport or insure Russian oil as long as it is sold below the price cap, Alun Cairns, Conservative MP, said, adding firms must be aware of the possibility that the price ceiling could be breached.
“I’m concerned that the same focus isn’t there from the international community when it comes to the Russian oil exports,” he said.
Russian oil shipments remain highly reliant on tankers insured in the UK for transportation, the think tank said. According to the CREA’s findings, in the 12 months since the price cap was introduced, £39.7 billion ($50.5 billion) worth of Russian crude has been transported on tankers using UK protection and indemnity (P&I) insurance.
“Russia’s reliance on UK insurance to transport their oil provides the UK with significant leverage which they can use to lower the price cap, and implement better monitoring and enforcement that would considerably lower Russia’s oil export revenues,” the authors of the report noted.
“It also shows the somewhat posturing nature of the support and aid that the UK provides to Ukraine, while at the same time supporting Russia’s ability” to pursue its “oil trade easily and globally,” the CREA stated.
The West of England P&I Club covered Russian oil products worth the most at over £17.1 billion ($21.7 billion), followed by NorthStandard, which covered £14.5 billion ($18.5 billion), the data showed.
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