Insurance dispute blocking oil tankers in Turkish waters resolved

The sanctions-driven insurance dispute that had disrupted oil exports from Russia’s Black Sea ports has been resolved, with maritime authorities saying 19 vessels had already passed through the Turkish Straits after providing satisfactory documentation.

Tankers had been forced to drop anchor near the Bosphorus and Dardanelles after Turkey demanded new proof of insurance in response to western sanctions on Russian oil.

Washington had hoped that a new price cap on Russian crude, which was designed to give vessels continued access to European insurance if the oil is sold for $60 a barrel or less, would ensure Russian shipments to third countries could continue after the introduction of EU sanctions last week.

But Turkey had blocked the vessels from transiting the straits for over a week after western insurers said they could not provide the blanket guarantee demanded, prompting US and UK officials to intervene with their Turkish counterparts.

The Turkish Straits is one of the busiest shipping lanes in the world and one of the main export routes for crude oil from Russia and Kazakhstan.

Turkey’s maritime authority said on Tuesday that of 26 tankers that were waiting “because they had not met our country’s justified request for an insurance confirmation letter”, all but four had provided the requested documentation. As of Tuesday, 19 had passed through the straits, it added.

“We are pleased that our new measure to protect our Turkish Straits has been accepted, as a result of the negotiations we undertook with our counterparts, and that maritime trade will continue normally,” it said.

Norway’s Gard, part of the international group of 13 protection and indemnity clubs, also said on its website on Tuesday that a resolution had been found.

“Following significant engagement between the International Group of P&I Clubs (IG) and the government of Turkey, an agreement has been reached allowing ships carrying crude oil cargoes to continue their voyages through Turkish-controlled waters.”

It advised its members to contact the club for the documentation needed for crude carriers. IGP&I, the umbrella group, could not immediately be reached for comment.

Many of the ships affected had been carrying oil from Kazakhstan, in a sign of the possible unintended consequences of the G7’s intervention in the oil market.

Oil produced in Kazakhstan by companies including Chevron and ExxonMobil is exported via pipeline across Russia to ports on Russia’s Black Sea coast, where it is loaded on to tankers for the journey through the Turkish Straits to the Mediterranean. However, it is not subject to the west’s Russian sanctions.