G7 countries set a $60-per-barrel price cap on Russian crude two years ago as part of Ukraine-related sanctions
Several Western insurance companies are continuing to provide cover for tankers shipping Russian oil, allowing it to reach international markets despite the G7 price ceiling, Reuters reported on Thursday, citing data from traders and shippers.
Five insurers including American Club, the Luxembourg-headquartered West of England, and Norway’s Gard reportedly provided services for 10 tankers carrying oil from Russia to Asia in 2024. The other insurance providers for crude originating from Russia reportedly include Maritime Mutual from New Zealand and London P&I Club. The companies insure vessels against oil pollution, injury and loss of life.
According to the data obtained by the news agency, American Club and West of England provided services for two oil tankers, the Gioiosa and the Orion I. Both vessels were reportedly loaded with oil from Russia’s state-run Rosneft in the Baltic Sea and sailed to China.
American Club told the agency that a ship flying the Panama flag was on its cover list, while West and Gard declined to comment on specific tankers. Maritime Mutual and London P&I did not respond to the agency’s request for comment on the issue.
Western governments introduced the price cap along with an embargo on Russian seaborne oil in an effort to hit the country’s economy, while at the same time keeping Russian crude flowing to global markets. The sanctions were imposed in December 2022 and were followed in February 2023 by similar restrictions on exports of Russian petroleum products.
Under the rules, Western firms are banned from providing insurance and other services for shipments of Russian crude, unless the cargo is purchased at or below $60 per barrel, a level significantly below the current market price.
Reuters noted that the volume of Western insurance cover for Russian oil cargo has not been reported since the cap was imposed. Those who stopped deals with tankers bearing Russian crude told the agency that they were doing so because there is no certainty about the price of the oil carried by this or that vessel.
According to LSEG data cited by the outlet, Russian companies have sold the flagship Urals crude at Baltic ports for an average of $69.4 a barrel so far this year, above the G7 price limit. Moscow has banned Russian enterprises from complying with the cap.
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