European governments have eased efforts to restrict Russia’s oil trade and delayed plans to keep Moscow out of key Lloyd’s of London’s marine insurance market, amid concerns over rising oil prices and tight global energy supplies. , allowed some international shipments.
Two months ago, the EU announced a global ban on the provision of marine insurance to ships carrying Russian oil, expecting concerted action with the UK government. However, the UK has yet to introduce similar restrictions.Britain’s participation is crucial to the effectiveness of such a ban, as London is the center of the Marine Corps insurance industry.
Meanwhile, Brussels amended some restrictions on dealings with state-owned Russian companies in late July, citing concerns over global energy security.
The joint UK-EU ban on marine insurance constitutes the most comprehensive restrictions yet on Russian oil, ending access to much of Moscow’s global tanker fleet for export.
However, US officials express concern An immediate global ban on marine insurance would pull millions of barrels of Russian crude oil and petroleum products off the market, pushing up prices.
European and British officials told the Financial Times in May that the UK had reached an agreement with the EU to ban insuring Russian oil cargoes.
But Britain’s latest sanctions against Russia, approved by parliament in July, will only ban the provision of insurance to ships carrying Russian oil to the UK, and will be limited from 31 December onwards. Until the end of the year, UK officials said they have not banned the provision of services to shipments from Russia to other countries.
Patrick Davison, head of underwriting for the Lloyd’s Market Association, a trade body for Lloyd’s insurers, said: “There is no current UK ban that will affect global shipments of Russian oil.” Given the nature of [re] For the insurance industry, the existence of EU restrictions could have a significant impact on demand for Russian oil shipments in London. ”
He said Lloyds was in close contact with [the UK government] “And we will work with them on any future sanctions they are looking to introduce.”
The UK Treasury said it was still exploring the best course of action. “We stand ready to impose further sanctions on Russia and, together with our allies, are working swiftly to ensure that they have the maximum effect on the Russian economy,” he said.
The EU insurance ban was introduced on June 4th and is still in force. This will prevent companies in the block from issuing new insurance for ships carrying Russian oil. Existing contracts are in effect until December 5th when all such business is prohibited.
However, the EU has amended some of its own sanctions, allowing European companies to trade with Russian state-owned companies such as Rosneft for the purpose of transporting oil to countries outside the bloc.
European companies can no longer be prevented from paying Rosneft and others for the purchase or transport of crude oil or petroleum products to third countries “where those transactions are strictly necessary”, a Commission spokesman said. told the FT.
In a statement, the EU said the measures were to “avoid any potential adverse impact on global food and energy security”.
Since June, the White House has urged G7 nations to support a price cap mechanism that would allow some of Russia’s oil to reach third countries, as long as they agree to pay below market prices for the cargo. I’ve been working
Officials in Washington said the US and UK are still planning to ban maritime services, including insurance, before the EU ban takes full effect in December. But they want to cap oil prices first. US President Joe Biden is keen to cut gas prices ahead of November’s midterm elections.
Sanctions lawyers say the EU appears to be weakening its efforts to stem the global flow of Russian oil, creating new uncertainty among traders over Britain’s commitment to a global insurance ban. said.
Sarah Hunt, a partner at law firm HFW, said trading companies were investigating whether it was now legal to buy Rosneft oil and ship it to countries outside the EU.
“New EU sanctions are effectively allowing European companies to withdraw Russian crude. We were surprised by this,” she said.
Lee Hanson, a partner at another law firm, Reed Smith, said the proposed EU sanctions amendment was a “huge setback” and lawyers hoped for “stronger” measures from the UK. He added.
Additional reporting by Alice Hancock and David Shepard