A FLIP-FLOP by the eu that allows Russian coal to move freely has led to uncertainty in insurance and shipping markets about a critical part of the bloc’s oil sanctions, reports Bloomberg.
The EU published new guidance declaring that transferring coal and fertiliser to countries outside the bloc is now allowed due to energy security concerns.
It followed an intervention in August that indicated a total prohibition on Russian coal shipments.
The US is alarmed that Europe’s steps could drive up oil prices and is trying to get G-7 nations to support a Russian oil price cap.
‘If they go about the oil sanctions and price cap in the same way, it would be quite difficult for industry,’ said the North of England P&I Association Ltd global claims director Mike Salthouse.
‘The point about effective sanctions, ones that everyone understands and can comply with, is that they have to be consistent and clear. The position that the EU has adopted on coal and fertiliser has been anything but that.’
According to Salthouse, the shift on coal has created broader uncertainty for vessel owners and insurers.
‘You’re still in the back of your mind saying: ‘this time last week, they made it clear it was unlawful and could do the same in a week’s time’,’ said Mr Salthouse.
While their policies could become more coordinated, EU’s pivot on coal has left insurers concerned about a lack of clarity
‘If you’ve had your fingers burned once, you might approach the carriage of oil with similar concerns, recognising that the sanctions position might change from the point at which you conclude the contract to the point at which you carry the cargo,’ said Mr Salthouse.
