• Home
  • News
  • Oil tankers with P&I club insurance piled up at The Bosphorus Strait
  • 2022 December 8 15:28

    Oil tankers with P&I club insurance piled up at The Bosphorus Strait

    A traffic jam of oil tankers has built up in front of Turkey’s Bosphorus Strait thanks to Ankara's new insurance paper demands — a knock-on effect of the sanctions against Russian seaborne crude that went into effect this week, according to POLITICO.

    However, a dozen of the tankers lined up at the key transport route connecting the Black Sea with the Mediterranean are carrying crude from Kazakhstan, not Russia, said Viktor Katona, lead crude analyst at intelligence company Kpler.

    "Russian cargoes seemingly don't have a problem, yesterday three tankers with Russian oil products had no problem passing through the strait," he said.

    EU members, as well as G7 countries and Australia, agreed to impose a price limit of $60 per barrel on Russian crude as of Monday. Under the deal, the countries ban insurance and shipping companies from offering their services to shipments of Russian oil to non-EU countries if it’s sold above the price cap. The EU also imposed its own ban on imports of Russian seaborne crude.

    Turkey has not joined the G7 insurance ban, and still imports Russian oil.

    As of December 2, Ankara started demanding that insurers confirm that ships would remain fully covered as they crossed the Bosphorus, Turkish waters, ports or terminals — even if the vessels were found to be in breach of the new sanctions.

    But the International Group of P&I Clubs said its clubs “cannot and should not” provide such a letter of unconditional guarantee, as doing so would expose “the Club to a breach of sanctions under EU, UK and US law and as such the Clubs cannot comply with the Turkish Authority's request.”

    As a result, oil tankers with P&I club insurance are now being held up, while ships covered by Russian-issued insurance are allowed through.

    "P&I clubs don't really issue letters of coverage for individual journeys, with cargo, vessel and journey destination — it's normally one paper insurance policy document carried throughout the year — but that's now what the Turks are asking for," Katona said. "Whereas the Russian insurers, for example Ingosstrakh, don't mind providing individual coverage certificates."

    Tracking data from Lloyd’s List shows one large crude tanker in the vicinity which loaded at the Russian port of Novorossiysk and 12 others that filled up at offshore loading terminals connected to the CPC pipeline, which carries mostly Kazakh and some Russian oil.

    Kpler data also showed that 12 of the loaded tankers in the queue had filled up from the CPC pipeline.

    Most of the vessels currently held up are either Suez tankers, which can hold 1 million barrels of oil, or Aframax tankers, which carry about 600,000 barrels.

    Volumes are attributed to Russia and Kazakhstan from the CPC pipeline on a quota system, with each load of oil having its own certificate of origin so there are no mix-ups. The Kazakh government earlier this year successfully negotiated to have its oil granted an explicit exemption to the EU Russian embargo, despite the CPC pipeline crossing through Russia.

    "It’s widely understood that vessels loading at that particular area are carrying Kazakh oil — the fact that they’re all being delayed … is strange, because they shouldn’t be caught up in this,” said Michelle Wiese Bockmann, markets editor and analyst at Lloyd’s List.

    “Either they’ve got a really bad administrative problem, or the Turkish authorities are playing hardball,” she said. “It's becoming quite an issue ... no crude tankers have gotten through."

    Earlier this year EU diplomats raised the possibility that banned Russian oil would seek to slip through the EU embargo using false certificates of origin from Kazakhstan.

    Brenda Shaffer, senior fellow at the Atlantic Council’s Global Energy Center and energy professor at the U.S. Naval Postgraduate School, said Turkey has been especially careful on the issue of possible sanctions violations in recent years.

    "Since the Kazakh origin oil will be supplied mostly to the EU market, its cargoes are undergoing special scrutiny," Shaffer said.

    A statement from the Kazakhstan government said the insurance issue is "being clarified."

    The European Commission declined to comment on whether any negotiations were ongoing with Turkey to resolve the issue.

    A U.K. Treasury spokesperson said: “The U.K., U.S. and EU are working closely with the Turkish government and the shipping and insurance industries to clarify the implementation of the oil price cap and reach a resolution."

    The spokesperson added that the price cap deal provides an insurance exemption for emergency situations such as oil spills, so "there is no reason for ships to be denied access to the Bosphorus Strait for environmental or health and safety concerns."

    Andreas Economou, director of the oil research program at the Oxford Institute for Energy Studies, said it was still too early to say whether the hold-up would affect global markets; the benchmark Brent crude price is down almost 10 percent over the last five days to about $78 per barrel.

    Katona said Russian crude in the Black Sea is mostly being delivered to Bulgaria, which has a one-year exemption from the EU ban, rather than through the straits, so Moscow is not bearing the brunt of the current logjam.

    "The pain is being felt elsewhere," Katona said, adding: "Ultimately now it's not a Russian problem, but a Western problem because it's affecting Chevron, Eni, Total and all the other companies who are involved in the upstream oil operations in Kazakhstan, [and] are shareholders in the CPC pipeline or are marketing and selling Kazakh oil."




2023 February 5

15:41 Stena Drilling sign a new contract with UK's Ithaca Energy for Stena Spey
13:19 New partnership aims to take Norwegian offshore wind to the next level
11:07 Hundreds evacuated after fire ignites on cruise ship in Sydney, Australia
09:38 Shell LNG bunker barge launched in Spain

2023 February 4

15:21 Milaha and Hareket sign a strategic alliance to provide integrated heavy lift and oversized transportation services
14:29 DOF awarded EPRD contract by Equinor
13:14 The Port of Sagunto doubles its natural gas traffic by 2022
11:03 GTT obtains funding from Bpifrance for the MerVent 2025 project, winner of the "Corimer 2022" call for expression of interest

2023 February 3

18:22 IAA PortNews’ summary of past week news
18:07 Port of Tallinn and Utilitas Wind to cooperate on the development of offshore wind farms
17:50 Gazpromneft Marine Bunker to supply 10,000 t of LNG for bunkering of Rosmorport’s ferries operating on Ust-Luga – Kaliningrad line
17:43 New container line connects the Port of Gothenburg with Iceland
17:23 OX2 and the Bank of Aland plan a Mega Green Port project in Aland
17:08 Sovcomflot’s new oil tanker Okeansky Prospect underwent first loading at port Kozmino
16:31 CMA CGM revises its NC Levant service connecting North Europe with East Med/Levant area
16:12 SCZONE and Hungarian HEPA will sign an expected joint agreement by the end of the month
15:46 DNV white paper outlines suggestions to achieve a sustainable maritime ecosystem in India
15:03 NYK Line receives 1st LNG-powered car carrier from China Merchants - Offshore Energy
14:32 PIL strengthens SEA linkages with new Thailand Philippines Straits Service
14:25 Atomflot and Baltiysky Zavod sign contract for construction of fifth and sixth nuclear-powered icebreakers of Project 22220
14:02 Niestern Sander signs contract for conversion project multipurpose offshore vessel
13:42 Maersk North America and Ashdod Port Company sign agreement to collaborate on logistics and supply chain innovation
13:24 Drydocks World and Aker Solutions form joint venture to upgrade production at UK’s Rosebank oil and gas field
12:54 Fincantieri holds float out ceremony for the third luxury cruise ship for Regent Seven Seas Cruises
12:36 Flood of Russian fuel oil into Singapore boosts bunker margins - Ship & Bunker
12:16 Vyborg Shipyard and Atlantrybflot sign acceptance/delivery certificate for lead factory freezer trawler of Project KMT02.02
12:13 Eight shipyard workers injured in blast on Vietnamese bulk carrier
11:38 RF Government postpones acquisition of two Kometa 120M hydrofoils again
11:32 China boosts imports of fuel oil blended from Russian barrels - Reuters
10:53 DP World wins bid for development of a mega-container terminal at India’s Deendayal Port
10:31 Fujairah VLSFO sees biggest daily gain since July - Ship & Bunker
10:19 Railway ferry Baltiysk to return to Ust-Luga-Baltiysk line on 13 February 2023
09:57 ZIM upgrades its Asia-US East Coast ZXB service
09:21 Rosatom supports 6th Modern Solutions for Hydraulic Works Conference as its Partner

2023 February 2

18:07 ZIM introduces a new premium line from South America West Coast to US East Coast
17:41 Italian ship makes record journey into Antarctic
17:25 WinGD demonstrated its latest X-DF-2.0 technology, on-engine iCER, to several LNG carrier owners
17:17 STX Dalian shipyard rebooted as Hengli Heavy Industry - Seatrade
17:06 Bunker sales at Vladivostok port in January 2023 fell by 45% YoY
16:57 The European Commission presents a Green Deal Industrial Plan to enhance the competitiveness of Europe's net-zero industry
16:34 Equinor says sanctions prevented it helping on Nord Stream - Reuters
16:15 Dan-Bunkering announces Managing & Commercial Director of Dan-Bunkering Europe
15:54 KSK Grain Terminal in Novorossiysk almost doubled its throughput in January 2023
15:33 Korean shipbuilders post KRW7tn in order intake in Jan 2023 - BusinessKorea
15:04 MOL becomes world's first company to earn AiP for vessel cyber resilience
14:42 Mitsubishi Shipbuilding and INPEX complete conceptual study for ammonia bunkering vessel
14:36 Admiralteyskie Verfi delivered large factory freezer trawler Mekhanik Maslak to Russian Fishery Company
14:12 Keppel to deliver Guyana's third FPSO
13:52 Coal supplies from Siberia to Asia via the ports of Russia’s South and North-West are on the verge of profitability - Bank of Russia
13:44 Samskip commences short-sea traffic between Iceland and APM Terminals in Gothenburg
13:39 MABUX: Bunker Weekly Outlook, Week 05, 2023
13:00 LUKOIL's liquid hydrocarbon production in the Russian sector of the Caspian Sea reached 50 million tonnes
12:21 Samsung Heavy receives an order for the construction of two LNG carriers worth $500 million - Offshore Energy
12:01 Tallink launches Baltic Sea protection cooperation with John Nurminen Foundation
11:40 Armada Technologies wins contract with Irish Ferries
11:20 India's Adani to invest in Israel after Haifa port takeover - Reuters
11:00 Stolt Tankers performs groundbreaking ship-to-ship methanol bunkering
10:34 ZIM introduces the new Thailand Fremantle Express service
10:14 MOL signs collaboration deal with Nagasaki Prefecture for shipbuilding-related industries and renewable energy projects
10:00 Oboronlogistics’ railway ferries delivered 72,700 t of cargo to Kaliningrad in January 2023