UK crackdown on Russia-linked tankers to be reviewed under pressure from insurers

The UK is reviewing its sanctions regime after blacklisting 25 tankers involved in Russian oil trading since the new government came to power in the summer.

Maritime minister Mike Kane told reporters that a ministerial group from departments involved in sanctions-related work is discussing plans to make the regime “even better” and is due to report next year.

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He declined to say if this meant mean more vessels would be designated.

It was “just to make sure we’re doing it right … and that different departments are singing from the same hymn sheet when it comes to sanctions”, he told reporters at an AP Moller-Maersk naming ceremony at the port of Felixstowe in eastern England.

Kane met insurers and brokers in London this week, when the insurance sector expressed concerns about the sanctions regime and the shadow fleet.

Britain has been at the forefront of using sanctions against Russia, although experts say the results are likely to have less impact than measures imposed by the US.

The UK has sought to use the size and reach of the London-located insurance sector to influence the shipping of Russian fossil fuels.

Western powers have tried to limit Moscow’s revenues through the oil price cap and by forcing Vladimir Putin to divert billions of dollars to build a fleet outside of the reach of Western regulators.

Insurers risk breaching sanctions if they cover vessels involved in the Russian oil trade above the price caps, and some have pulled cover as a result.

But the sector has warned that the attempt to coerce the Kremlin to accept the restrictions of the price cap has not worked, because it has sought to build alternative finance and insurance structures.

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The 12-member International Group of P&I Clubs said in April that the oil price cap was flawed and increasingly unenforceable.

It told a parliamentary inquiry into the effectiveness of sanctions and the oil price cap that the policies had led to 800 tankers leaving the group.

That inquiry did not complete its work after former prime minister Rishi Sunak called an early election.

In one of its final acts, his government introduced rules that have allowed the new Labour government to follow the lead of US regulators and impose measures on individual vessels.