Insurance ban to tighten squeeze on Russian oil shipments

Insurance ban to tighten squeeze on Russian oil shipments

Brokers and underwriters gathered this week in Lloyd’s of London’s historic underwriting room to celebrate the Queen’s platinum jubilee, twice ringing the Lutine bell — a symbol of the insurance market’s shipping roots that was traditionally struck once to mark a lost vessel and twice for its safe return.

A different kind of peril now faces the centuries-old market after the UK and Brussels agreed to ban insurance on ships carrying Russian oil as they ratchet up sanctions on Moscow over the invasion of Ukraine.

The move threatens to shut one of the world’s biggest crude producers out of large parts of the maritime export market. Ships carrying Russian oil would face a scramble to find alternative insurance, without which they would face being turned away from global ports.

Russia’s oil exports have largely held up despite western sanctions on its financial system. Industry executives say a co-ordinated insurance ban could change that and address the fundamental problem with the EU’s seaborne oil embargo: Russia can simply redirect its crude elsewhere.

“The impact of a UK and EU maritime insurance ban on ships carrying Russian oil cannot be overstated,” said Leigh Hansson, sanctions partner at law firm Reed Smith. “We’ve seen the impact the