THE EU’s latest sanctions on Russian petroleum could end up hurting the world’s tanker fleet of industry-standard insurance, reports Bloomberg News.
It’s a move that threatens to undermine US efforts to avert an oil supply shock, said the report.
The bloc’s eighth round of sanctions states that if a tanker owner transports Russian crude above an agreed price threshold, their ship would be prohibited from getting eu services needed to ship the commodity.
Owners could avoid that fate by agreeing to transport oil bought at a capped price.
‘In the event that a vessel under the flag of a third country has transported Russian crude oil or petroleum products purchased at a price above the price cap, it should be prohibited to provide technical assistance, brokering services, financing or financial assistance, including insurance, related to any transport in the future by that vessel of crude oil or petroleum products,’ said one of the relevant clauses.
It’s unclear that this provision was coordinated with the US since the nation was telling EU allies that countries who disagreed with the price cap plan could benefit from negotiating lower prices on Russian oil.
Said Rapidan Energy Group analysts: ‘Third-country ships that are found to have violated the price cap can never again use EU services, such as insurance and finance.’
‘Because many shipowners worldwide will be reluctant to permanently forfeit their access to EU shipping services, we expect they will avoid non-compliant cargoes,’ said the analysts.
‘This will force Putin to either accept the price cap (a course he has explicitly ruled out) or curtail exports and shut-in production.’
