The UK will not provide insurance for ships carrying Russian oil, making a key step in the G7’s attempts to impose a price cap on Russian oil exports.
ccording to the Financial Times, the legislation will take effect from December 5, preventing countries from using the UK’s services to transport Russian oil unless it is purchased at or below the oil price cap set by the G7 and Australia.
The legislation will initially only apply to crude oil exports, but from February 5 will be extended to cover refined products like gasoline and diesel, mirroring the EU’s own timeline.
However, the UK did not clarify the exact mechanism for ensuring insurers knew the price of oil whose shipment they were covering.
Under the system, insurers would have to seek a formal statement from anyone shipping Russian oil that it had all been bought at an appropriate price.
It would also exempt insurers from penalties if customers misled them about the price of the oil being transported.
Earlier, and more specifically during June, the UK and EU agreed to a ban on insuring ships carrying Russian oil, after the European Council agreed to ban seaborne imports of Russian oil.
The insurance ban could have much broader consequences for Russian exports, says Financial Times, as it the country will have to look for insurance in smaller, less developed markets.
In addition, a senior commission official added that the G7 countries were working towards an insurance ban. The ban would not take effect for six months, the official said, after which Russia will have “a big problem shipping the stuff around.”
The partial ban on Russian oil imports covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine, Michel announced in a tweet.