As Bloomberg writes, the shadow fleet not only allows Russia to bypass sanctions on oil sales but also creates a global environmental threat, as retired ships are often used in transportation, and insurance is provided by sanctioned companies that may simply refuse to pay insurance to 'unfriendly' countries.
Before Russia's full-scale invasion of Ukraine, the vast majority of tankers carrying Russian oil were insured by Western companies that are part of one of the international mutual insurance and indemnity clubs. Now, insurers from G7 countries can only work with oil purchased at prices below the $60 per barrel cap.
The publication found that some ships still have Western insurance, but a significant portion has switched to Russian insurance from 'Ingosstrakh', 'Alfastrakhovanie', and 'Sogaz', which are not subject to G7 restrictions. They are supported by the Russian National Reinsurance Company (RNRC), which is controlled by the Bank of Russia and has been sanctioned internationally. A serious incident could raise the question of payments to 'unfriendly' states, according to Bloomberg.
Meanwhile, Turkish authorities hope to receive insurance payments from Russian companies in case of an incident with tankers passing through the Bosphorus and Dardanelles. Ankara is not in direct confrontation with Moscow, and payment can be made in lira, while refusal to pay in a 'friendly' country threatens reputational losses.
In the case of Estonia and Denmark, through whose waters about 7% of the world's maritime oil passes, the prospects are unclear. According to Danish Business Minister Morten Bødskov, the country's government is 'seriously concerned' about the 'dubious insurance' of ships passing through the straits. A wide range of states is at risk: after leaving the Danish straits, tankers often cross the North Sea, the English Channel between the UK and France, and then sail past Portugal and through the Strait of Gibraltar and waters near Spain.
Craig Kennedy from Harvard University believes that if the Russian government decides not to pay compensation, it will cite Western sanctions as the reason, as has happened in other sectors. The position of Russian officials is that Moscow is not responsible for the creation of the shadow fleet, but Western sanctions are.
Photo: AP