Russian-linked Ships Face Insurance Scrutiny in European Waters
A number of European nations have followed the lead taken by the UK in demanding insurance details from Russian-linked ships passing through their waters, something that is expected to put pressure on Russia’s exports through the Baltic.
The UK started this crackdown in October, challenging so-called shadow fleet vessels with what the government described as “suspected dubious insurance” to provide details of their insurance status as they pass through the English Channel. Failure to comply sees ships added to the UK’s growing sanctions list.
The initiative has now been joined by Denmark, Estonia, Finland, Lithuania, the Netherlands, Norway, Poland, and Sweden.
Danish Efforts to Bar Russian Shadow Fleet in the Baltic
The Danish government has been in discussions with neighbours for months looking at ways of barring some of Russia’s shadow fleet from transiting the Baltic Sea, something that gained added importance following a collision involving a laden Russian shadow tanker earlier this year.
Russia sends about a third of its seaborne oil exports through the Danish straits with around one in three of these ships having unknown insurance.
Today, some 175 tankers laden with Russian oil transit the Baltic each month, according to Craig Kennedy who runs the Navigating Russia substack and proposed similar Baltic insurance checks in a paper for the Brookings Institution in May this year.
Impact on Russian Oil Exports
If the insurance verification program is successful in the Baltic, Kennedy has suggested setting up a similar one in the Aegean.
“Together with the Baltic, this would deny Russia the ability to load up to 80% of its oil exports on shadow tankers. Instead, Russia would be compelled to use mainstream tankers, thus increasing the exposure of export revenues to price cap constraints,” Kennedy wrote.
Widening Sanctions and Future Actions
The move by the northern European nations this week coincides with a widening of the EU’s sanctions net on tankers moving Russian oil around the world. The bloc designated 52 more tankers on Monday, having previously listed 17.
Further sanctions are expected in the new year when Poland takes over the presidency of the EU from Hungary.
Global Call to Action Against Shadow Fleet
At the European Political Community Summit in July, Keir Starmer, the British prime minister, announced what was described as a shadow fleet call to action, something the US and Canada joined in October.
The call to action urges all member states of the International Maritime Organization (IMO) to prevent illegal operations in the maritime sector by the shadow fleet.
Signatories to the movement have agreed to share information on the practices and operations of the shadow fleet, to coordinate responses to the risks posed by its ships and facilitators, and to work with the private sector and other maritime stakeholders to address the threat.
India Implements Stricter Guidelines for Ship Insurance
In related news, the directorate general of shipping in India, a top buyer of Russian oil, has recently put in place new guidelines to ensure all ships calling at the world’s most populous nation have the correct protection and indemnity (P&I) insurance certificates in place.