August 8, 2022

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West eases efforts to restrict Russian oil trading as inflation and energy risks mount

2 min read

European governments have eased back on efforts to curb trade in Russian oil, delaying a plan to shut Moscow out of the vital Lloyd’s of London maritime insurance market and allowing some international shipments amid fears of rising crude prices and tighter global energy supplies.

The EU announced a worldwide ban on the provision of maritime insurance to vessels carrying Russian oil two months ago, expecting co-ordinated action with the British government. However, the UK is yet to introduce similar restrictions. UK participation is pivotal to the effectiveness of any such ban because London is at the centre of the marine insurance industry.

Meanwhile, Brussels in late July amended some curbs on dealing with state-owned Russian companies, citing concerns over global energy security.

A joint UK-EU prohibition on maritime insurance would constitute the most comprehensive restriction to date on Russian oil, ending access to much of the global tanker fleet for Moscow’s exports.

But US officials have expressed concern that an immediate global ban on maritime insurance would push up prices by pulling millions of barrels of Russian crude and petroleum products off the market.

European and British officials told the Financial Times in May that the UK had agreed with the EU to co-ordinate a ban on insuring Russian oil cargoes.

However, Britain’s latest sanctions against Russia, approved by parliament in July, only prohibit providing insurance to vessels carrying Russian oil to the UK, and only after December 31. The legislation was introduced after the government promised to outlaw the import of Russian oil from the end of the year but does not ban the provision of services to shipments from Russia to other countries, UK officials said.

“There is no current UK ban affecting global shipments of Russian oil,” said Patrick Davison, underwriting director of the Lloyd’s Market Association, an industry group for insurers at Lloyd’s. “Given the global nature…

2022-07-31 12:37:13

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