A tanker in the sea near Dardanelles, Turkey. By Alex Khripunov @ Shutterstock.com
After sanctions on Russian oil created confusion in the insurance markets for oil shipping, Turkey closed its shipping straits leading to and from the Black Sea, the Dardanelles, and the Bosphorus. Now, it has once again reopened those straits to oil shipping after sorting out the insurance issues. Alex Longley and Julian Lee report for Bloomberg:
A backlog of tankers waiting to haul oil through Turkey’s vital shipping straits is clearing, offering evidence that authorities in Ankara have resolved a spat with the insurance industry that arose following sanctions on Russia.
Tankers able to haul in excess of 15 million barrels of crude have navigated either the Bosphorus or Dardanelles shipping straits since Saturday, according to tanker tracking data compiled by Bloomberg. Those flows were somewhat impeded by poor weather at the weekend, but conditions were more favorable on Monday morning, according to information from local port agents.
Turkish maritime authorities said in a Tweet on Sunday that four tankers were scheduled to sail through the Bosphorus on Monday.
One shipping official with knowledge of the situation confirmed on Sunday that previously blocked tankers were being allowed through. He asked not to be identified discussing a commercial matter.
The traffic jam built up, halting millions of barrels of mostly Kazakh crude, because G-7 sanctions on Russia created a layer of doubt that oil tankers would be insured against risks like collisions and spills — longstanding environmental concerns for Turkey.
The government in Ankara demanded letters proving that each individual shipment was covered for transit, something insurers initially resisted. The US and UK pressed Turkey to revise its approach.
But on Saturday, Turkey distributed a sample letter to insurers that it would find acceptable as proof of cover, according to the shipping official and a port-agent report. The letter was similar to versions that had already been submitted to Turkish authorities, creating optimism that a solution had been found, the person said.
The maritime authority’s Tweet said on Sunday said there were 12 tankers waiting that still hadn’t submitted the correct letter.
On Dec. 5, Group of Seven sanctions on Russia imposed a $60 a barrel cap on the price of the nation’s crude oil.
Anyone paying above $60 wouldn’t be allowed to access industry standard insurance. The problem for Turkey was being able to know which shipments were bought under the cap — and hence had industry standard insurance — and which were not.
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