The problems are caused by the sanctions
The use of the Northern Sea Route (NSR) will let solve the insurance problems, Boris Ridin, Senior Underwriter, AMT Insurance, said at the 3rd Annual Conference “Risks in Maritime Insurance: Best Practices, Russian and International Experiences”.
“No foreign policies are needed on the Northern Sea Route, domestic opportunities can be easily used there. As for the transition, it is a great problem indeed ... A ship sailing from Southeast Asia across the Indian Ocean will not be possible to complete the transition on a single tank. So a call in Colombo in needed but they will not let you into Colombo with our policy, the same with India... No problems will appear with the passage of the Suez Canal but it’s a real problem with other routes ... So far, the events develop in such a way that Russian insurers stays at home and provides insurance services here,” said the expert.
The sanctions, first introduced by the EU and the U.S. in 2014, were significantly expanded after the beginning of Russia’s special military operation in Ukraine in February 2022. They currently consist of a broad spectrum of sectoral measures, including restrictions on finance, energy, technology and dual-use goods, industry, transport and luxury goods.
The EU’s insurance ban was introduced on 4 June 2022. It prevents companies in the bloc from writing new insurance for any vessel carrying Russian oil anywhere.
The Northern Sea Route is a single transport system in the Russian Arctic sector. It stretches along the northern coasts of Russia across the seas of the Arctic Ocean (Kara, Laptev, East Siberian, Chukchi seas). The route links the European ports of Russia with the mouths of navigable rivers in Siberia and the Far East. In August 2022, a plan for the development of the Northern Sea Route (NSR) until 2035 was approved. The plan includes over 150 activities with total financing nearing RUB 1.8 trillion.
According to the plan, the annual cargo traffic on the Northern Sea Route is to reach 80 million by 2024, 150 million tonnes by 2030, 220 million tonnes – by 2035.