(Reuters) – Lloyd’s Register has told India’s Gatik Ship Management, which has become a major carrier of Russian oil since the war in Ukraine, that it will decertify 21 of its vessels by June 3, the shipping company told Reuters.
It is the latest setback for Gatik, which was also forced to find new flags for 36 of its ships after they were flagged by St. Kitts & Nevis International Ship Registry.
“Lloyd’s Register is committed to facilitating compliance with sanctions regulations for trade in Russian oil,” it said in an email to Reuters. “Where supported by evidence, we withdraw class and service from any vessel deemed by the relevant authorities to be in breach of international sanctions.”;
Classification societies such as Lloyd’s Register in London provide services including seaworthiness checks, certification which is essential to ensure insurance and access to ports.
However, Lloyd’s Register said 11 of the Gatik vessels it declassified were also certified by the Indian Register of Shipping.
Gatik, which is based in the Indian city of Mumbai according to shipping databases, did not respond to emailed requests for comment.
A major US insurer, American Club, also told Reuters it no longer provides cover for Gatik vessels, while Russian insurer Ingosstrakh said it would not work with Gatik in the future.
Neither the insurance companies, Lloyd’s Register nor the flag register explained exactly why they have stopped doing business with Gatik.
In response to Russia’s invasion of Ukraine, Western powers imposed a price cap on Russian crude oil at $60 per barrel.
While non-EU countries can import seaborne Russian crude, Western shipowners and insurers are prohibited from handling such cargoes unless they are sold at or below that price.
Last month, spot prices for Russian crude rose above $60 a barrel and some ship insurance executives said they were nervous about breaking the rules because they could not independently track the value of cargoes.
India does not recognize the sanctions against Russia and has quickly become the largest buyer of seaborne Russian crude.
Western efforts to reduce the amount of revenue Russia earns from its energy resources are having a disruptive effect, as are Western sanctions against oil exports from other countries such as Iran and Venezuela.
But the opacity and limited oversight of the shipping sector means many ships carrying cargo from sanctioned countries continue to sail by finding new flags and non-Western registries or insurance companies, raising safety and liability concerns.
Each vessel requires documents including a flag register.
Ships usually have protection and indemnity insurance that covers liability claims including environmental damage and injury. Separate hull and machinery policies cover vessels against physical damage.
While Lloyd’s Register releases the classification for 21 Gatik vessels, at least 28 were listed as certified by the Indian Register of Shipping, according to the IRClass website.
IRClass, which is recognized globally, did not respond to requests for comment.
Gatik emerged this year as a leading transporter of Russian oil to India using a fleet of tankers numbering more than 40, shipping data show.
American Club, one of the world’s top 12 P&I insurers that together provide coverage for about 90% of the world’s ocean-going tonnage, said it previously covered most Gatik vessels but in early April no longer did, declining to say why .
Ingosstrakh, a major Russian insurer active in ship coverage but not part of the top 12, told Reuters this month that its insurance cover for Gatik’s Prometheus tanker expired in April and had not been renewed.
Ingosstrakh said they “had to decline certain requests for insurance that they received from Gatik due to the risks identified as part of our negative media review procedure,” referring to negative media coverage without being more specific.
“We can also confirm that we do not plan to work with Gatik in the future,” the privately owned Russian insurer said in response to questions from Reuters.