Tankers pile up off the Turkish coast after EU price cap on Russian oil

Tankers pile up off the Turkish coast after EU price cap on Russian oil
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Around 19 vessels massed in Turkish waters after Ankara demanded confirmation of insurance cover

Oil tankers stacked up off the coast of Turkey one day after the Western countries imposed a price cap on Russian crude oil, as Ankara insisted on new proof of insurance for all vessels, the Financial Times reported on Monday.

Around 19 crude oil tankers were waiting to cross Turkish waters on Monday, the report said, citing ship brokers, oil traders and satellite tracking services.

A $60 per barrel price cap imposed by the Group of Seven nations, Australia and the 27 European Union states on Russian seaborne crude oil took effect this week, the latest of Western sanctions to suppress Moscow after its invasion of Ukraine.

The agreement allows Russian oil to be shipped to third-party countries using tankers from G7 and European Union member states, insurance companies and credit institutions only if the cargo is bought at or below the cap.

Russia said on Monday that a Western price cap on its oil would destabilize global energy markets but would not affect its ability to sustain the war on Ukraine.

According to the FT report, four oil industry executives said Turkey had demanded new proof of insurance in light of the price cap. A Turkish transport ministry spokesman did not immediately respond to a request for comment.

Ankara has asked all crude tankers passing through the Turkish straits to provide letters from their protection and indemnity providers, confirming that insurance cover would remain in place to cover incidents such as oil spills and collisions. But the International Group of P&I Clubs, which represents 13 mutual insurers providing liability cover to around 90 per cent of global shipping, said on Monday that the Turkish request went “well beyond” the general information normally required.

The vessels had dropped anchor near the Bosphorus and Dardanelles, the two straits linking Russia’s Black Sea ports to international markets. The first tanker arrived on November 29 and has been waiting for six days, according to a ship broker who asked not to be named.