Insurers and Turkey reach deal over oil shipments

Insurers and Turkey reach deal over oil shipments
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Turkey on Tuesday said it had reached a deal to end a tanker logjam which built up on its Bosphorus and Dardanelles straits and left millions of barrels of oil stuck out of two of the busiest maritime trade routes

Turkey and insurers have reached an agreement to enable vessels carrying oil to sail through Turkish waters freely, Norwegian ship insurer Gard said on Tuesday as the backlog of tankers waiting to haul oil through Turkey’s vital shipping straits have started to clear over the weekend.

"Following significant engagement between the International Group of P&I Clubs (association of ship insurers) and the government of Turkey, an agreement has been reached," Gard said in a statement on its website.

The agreement allows the continuation of a new regulation requiring crude oil tankers to present an insurance confirmation letter before transiting Turkish straits.

Tankers carrying oil cargoes had been stuck for days, halting millions of barrels of mostly Kazakh crude, following a new Turkish measure which required ships to have insurance cover at all times, after G-7 sanctions on Russia created doubt that oil tankers would be insured against risks like collisions and spills.

Turkey's Maritime Authority said that 22 of the 26 crude oil tankers that arrived at the Bosphorus had presented the necessary letter, and 19 of them had already transited the strait.

"It is pleasing that the talks we have been holding with our counterparts have concluded with the acceptance of our new regulations that will protect the Turkish straits and that maritime trade continues as ordinary," the maritime authority said.

Western insurers have said the regulations would mean they would have to provide cover even in the event of a ship being in breach of sanctions against countries including Russia, which is something they were not prepared to do.

The revised letter template showed the wording had changed which indicated that insurers would not bear liability in all circumstances, Reuters said.

Millions of barrels of oil per day move south from Russian ports through Turkey's Bosphorus and Dardanelles straits into the Mediterranean.