Marine insurers say they are still unclear over whether they will face a new set of sanctions from the European Union, preventing them from providing cover to ships transporting Russian oil exports.
As the EU deliberates over its next move, brokers are telling shipping clients to carry on until the latest sanctions developments are official.
“Shipowners are working closely with their P&I clubs to make sure their business complies with all sanctions. As long as that is the case, then it is business as usual until they hear something different from the EU or US,” one London-based broker told TradeWinds.
Some major marine insurers have already withdrawn business from Russia. This includes either not renewing, or taking on fresh business from Russian shipping clients, because of the potential to clash with future sanctions.
The US recently announced direct sanctions against several shipping companies.
However, insurers have largely not taken the same action against the non-Russian international fleet carrying Russian oil exports.
Many insurers doubt whether the EU would push on with sanctions against shipping and shipping services until it makes an official commitment to banning Russian oil imports.
Greece, Cyprus and Malta are already reportedly voicing opposition to direct sanctions against shipping and a ban on EU-flag ships carrying Russian crude exports.
Safety consequences
There is also a growing argument within the EU that pressure on protection and indemnity insurers to withdraw cover from ships doing business with Russia could be counterproductive, and have disastrous safety consequences.
P&I insurance principally provides cover for the third-party victims of ship casualties and oil pollution. Withdrawal of P&I cover could leave EU coastal states exposed to the risk of not being able to secure financial compensation in the case of a marine casualty, or oil pollution incident.
“Forcing the withdrawal of P&I cover from ships trading Russia oil poses an enormous risk for European coastal states, and that is a risk they probably can’t afford to take,” one insurance expert said.
