India has approved four Russian companies to supply marine insurance while pressing ahead with plans for a domestic protection and indemnity club to ease the pressure of Western sanctions on its oil imports.
Three of the providers, VSK Insurance, Sogaz Insurance Co and AlfaStrakhovanie, have been given authorisation until 20 February 2025 while a licence for Ingrosstrakh Insurance Co was extended to March 2029, according to the shipping regulator’s website.
India has vied with China as the biggest importer of Russian crude since the invasion of Ukraine but volumes have fallen from the highs of May 2023 amid sanctions and pricing issues, Kpler data shows.
A US decision to blacklist 14 Sovcomflot tankers in February led to some laden ships idling for weeks before switching deliveries from India to China after refineries refused to accept deliveries.
The move to approve more insurers from Russia could be seen as a move away from Western insurance providers.
But a document posted on the directorate general of shipping website includes a clause that bars one Russian provider from paying out claims on ships that breach Western sanctions.
A signed sample document linked to AlfaStrakhovanie’s licence says that ships are subject to the laws and regulations of countries including the US, European Union, the UK and China.
“No insurer shall be liable to pay any claim … [if] such benefit may expose that insurer or its reinsurers to any sanction, prohibition, restriction, law or regulation as described,” it said.
The clause would be in line with documents seen by the Financial Times and Danish journalism outfit Danwatch that suggested Ingosstrakh was subject to similar measures.
Ship insurance constraints
Insurers can only cover ships and Russian oil cargoes if crude barrels are sold below $60 a barrel or they will be in breach of G7 sanctions.
G7 insurers have increasingly pulled out of the trade as prices have spiked, with the main Urals export grade trading Friday at about $80 a barrel.
Data from the Centre for Research on Energy and Clean Air suggests the proportion of crude tankers hauling Russian oil owned or insured by G7 and EU companies has been cut from 62% at the beginning of the Ukraine war to 26%.
India’s finance minister, Nirmala Sitharaman, told a maritime conference last year that India setting up its own P&I club would “reduce India’s vulnerability to international sanctions and pressures to provide greater flexibility in shipping operations”.
Shipping Corp of India held a day-long session on setting up an Indian club earlier this month.
An agenda included discussions on key challenges to overcome and invited experts from finance, shipping and insurance bodies.
“The primary focus will be on deliberating the concept of establishing an Indian P&I club,” it said.
Read more
- Iran and Houthis in IMO firing line after deadly and sustained attacks on shipping
- Red Sea premiums lift container ship charter rates to highest level in nine months
- India tells crew managers to keep local seafarers away from Red Sea hot spots
- Shipping Corp of India hunts secondhand MR tanker
- Geopolitical tensions and transformative forces headline Singapore maritime talks
