Turkish mess: straits also blocked for tankers carrying Kazakh crude oil, due to insurance
Tankers carrying mostly Kazakh oil from Russian ports to international markets are stranded in Turkish waters of the Bosphorus and Dardanelles as Turkey insists on proof of insurance being presented.
The tanker gridlock began earlier this week, on the day the G7 and EU price cap on Russian oil exports went into effect. Under the cap mechanism, ships carrying Russian oil can receive Western insurance coverage and financing services only if the cargo is marketed at or below the cap of $60 a barrel. Even the ships themselves, if coming from a Western country, are covered by the roof mechanism.
But Turkey is blocking tankers carrying non-Russian oil and insisting they prove they have obtained insurance cover from Western companies, the FT reported, which said as many as 19 tankers piled into the Turkish straits on Monday. Insurers, meanwhile, said they were unable to cover these vessels and refused to provide the documents requested by Turkey.
The number of tankers stranded in Turkish waters has risen to at least 20, totaling 18 million barrels of mostly Kazakh crude, according to a new report from Bloomberg . Even if one million barrels would be Russian Urals destined for India. The UK and US governments are trying to persuade Turkey to drop the requirement for proof of insurance coverage, the report reads.
The oil that has been stuck in Turkey is most likely destined for Europe, which in addition to the G7 price ceiling has also implemented an embargo on Russian crude arriving by sea. According to Bloomberg, Turkey may be feeling anxious that the oil is coming from a Russian port and wants to make sure it doesn't violate sanctions.
According to the FT , Turkey also fears that the price cap could increase the number of uninsured vessels passing through the straits, with the risk of leakages that would not be covered if they went uninsured. This appears to be the first of what could be many unintended consequences of the price cap.
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The article Turkish mess: straits also blocked for tankers carrying Kazakh crude oil, due to insurance, comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/pasticcio-turco-stretti-bloccati-anche-per-le-petroliere-che-portano-greggio-kazako-a-causa-delle-assicurazioni/ on Wed, 07 Dec 2022 16:49:52 +0000.