(Reuters) — Moscow is seeking to strengthen the recognition of Russian marine insurance to allow oil and related products to be shipped overseas in the face of Western sanctions, a government official was quoted as saying on Tuesday.
Western sanctions imposed in response to Russia’s military campaign in Ukraine have limited Russia’s ability to secure costly liability insurance for its ships — a segment that requires financial muscle and is dominated by European reinsurers, where Russia has little experience or capacity.
Deputy Transport Minister Alexander Poshivay, speaking at a China-Russia energy conference in Moscow, acknowledged the challenges facing Russian shippers.
In addition to the lack of access to insurance services traditionally provided by European and American companies, they had also had to deal with the non-recognition of certificates issued by Russian insurance companies and the Russian National Reinsurance Company due to Lloyd̵7;s syndicate declaring Russian waters a war danger zone.
The European Union and the Group of Seven governments have been trying to agree a price cap for Russian seaborne crude — which represents about 70% to 85% of Russia’s crude exports — to limit Moscow’s ability to finance its campaign in Ukraine.
The main tool to enforce it would be to ban shipping, insurance and reinsurance companies from handling cargoes of Russian crude around the world, unless they had been sold for less than the cap set by the G7 and its allies.
Mr. Poshivay said Russian state-flagged vessels now denied insurance by Western companies were insured with Russian insurers and reinsured with the Russian National Reinsurance Co., according to Interfax.
The news agency quoted him as saying that Turkey recognized Russian insurance of sea cargo and that India and China recognized most Russian insurance but not all.
“The issue (of recognition of Russian insurance) should be worked out with the whole world,” Poshivay said, adding that the specific conditions “are determined by intergovernmental agreements.”
No comment was immediately available from Turkish, Indian or Chinese authorities. However, a source at a Turkish shipping company said Turkish authorities had not given any instructions or unofficial guidance on recognizing Russian insurance.
Mr. Poshivay proposed that China recognize the certificates issued by Russian marine insurance and reinsurance companies as guarantees of risk coverage.
He said that in the first nine months of this year, the Russian Federation had increased seaborne exports of hydrocarbons to China by 25%, to 87 million tons.