The ban on insurance, which is included in the sixth package of sanctions, will come into force in six months and is a very serious blow.

The European Union, as part of the sixth package of sanctions against Russia, plans to ban insurance for tankers carrying Russian oil .

The Wall Street Journal writes about this , citing EU officials and diplomats.

The insurance ban, which will take effect in six months, is a very serious blow, traders and shipowners say. Few companies are willing to transport oil on uninsured tankers.

According to the WSJ, shipowners and traders use two main types of insurance to protect themselves from potential losses due to oil spills and other hazards.

One of the types is insurance of the hull and equipment against physical damage to ships. This insurance is usually bought at the Lloyd’s Market in London (an international insurance market whose members act as syndicates for insurance and risk distribution of various enterprises, organizations and individuals – UNIAN).

Another type of insurance is protection and indemnity, covering the liability of third parties. The international P&I group, with member clubs in Norway, the UK, the EU and other countries, provides this type of insurance for approximately 95% of the world’s tanker fleet. Group officials said they would stop insuring ships carrying Russian oil if the EU banned it.

The insurance ban is said to make it harder for Russia to sell oil to Asia and increase the likelihood that oil prices will remain high or rise.

Russian officials have already predicted that oil production could fall by 17% this year due to Western sanctions. Analysts say that a significant part of the oil fields that Russia is now closing will be permanently lost.

(C)UNIAN 2022