The European Union is looking to stop insurance companies from doing business in Russia linked to the country’s transportation of oil, according to a new report from Bloomberg.
A draft document seen by reporters from the news service reportedly said that ambassadors were considering plans on phasing out the import of Russian crude oil over the next six months and refined fuels by the end of the year.
Bloomberg wrote: “Ship insurance is crucial to the transport of the world’s commodities. Charterers insist a vessel has what is known as protection and indemnity cover, which protects against the risk of oil spills where costs can run into billions of dollars. If cover cannot be provided for some cargoes, their trading can grind to a halt. Insurance is one of the key measures the U.S. and Europe have used in the past to limit Iranian oil exports.”
The proposed ban, wrote Bloomberg, would extend to providing, “[…] directly or indirectly, technical assistance, brokering services, financing or financial assistance, or any other services, related to the transport, including through ship-to-ship transfers, to third countries of crude oil and petroleum products which originate in Russia or have been exported from Russia.”
It is understood that this aspect of the ban would include insurance companies.
Russia’s invasion of Ukraine has upended much of the insurance market within the country as insurers and reinsurers have stampeded to leave. Other firms, such as ratings agency AM Best, have halted all their commercial activities in Russia. As a leaving present, AM Best also downgraded and withdrew the credit ratings of two Russian insurance companies. S&P have done this, too.
Meanwhile, the tumult over the 500-plus planes trapped within Russia’s borders rumbles on, with Lloyd’s reportedly engaging law firm Clyde & Co. to advise on its position when claims are made against insurers for the lost aircraft.
