The UK has not, as expected, followed the European Union in banning marine insurers from covering Russian oil exports outside Europe.

As London is a leading marine insurance market, the support of the UK was viewed as essential for the success of the EU sanctions to prevent Russia from selling its oil to Asia.

The UK legislation only prevents the provision of financial services, including insurance, for the export of Russian oil, coal and energy-related goods to the UK from 31 December 2022.

The omission of a ban on marine insurance covering global Russian oil exports has been viewed as an attempt to allow Lloyd’s of London — and the wider London commercial insurance market — the freedom to continue covering the trade.

The British government said it is continuing to develop its sanctions against Russia.


However, the global nature of marine insurance means that — even though there is no direct UK ban on insuring Russian oil shipments globally — many London marine insurers will still be strongly influenced and guided by the EU sanctions.

Most of the London marine insurers either have EU-based operations or reinsure their business through EU-based reinsurance giants such as Munich Re, SCOR and Hannover Re.

Similarly, the protection and indemnity mutuals, which are largely based in the UK, have already established offshoots in the EU to write local business following Brexit and will be required to comply with EU regulations.

EU-based reinsurers also participate in the International Group of P&I Clubs’ $3bn reinsurance programme, which means its member clubs will be required to operate in line with European sanctions against Moscow.

The EU sanctions were also weakened recently to allow some Russian oil exports outside Europe.

Brussels said it will allow companies in member states to deal with exports through Russian oil majors such as Rosneft and Gazprom, “with a view to avoiding any potential negative consequences for food and energy security around the world”.

Fearnley Securities said the changes to the EU’s sanctions making it easier to ship Russian oil to countries outside the bloc are likely to benefit the suezmax and VLCC sectors.

The move appears to be linked to US concerns that the European sanctions would lead to a further escalation in energy prices, damaging developing countries and benefiting Russia.

However, although the sanctions have been weakened, the EU ban on insuring global Russian oil shipments remains.