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U.K. expands sanctions against Russian oil fleet and its insurers

November 25, 2024

(Bloomberg) - The U.K. government expanded its sanctions against Russia鈥檚 energy industry on Monday, blacklisting dozens of tankers responsible for moving the nation鈥檚 oil as well as two insurers involved in the trade.

The measures ban any cooperation with Moscow-based insurers AlfaStrakhovanie Plc and VSK, which are 鈥渃arrying on business in a sector of strategic significance to the Government of Russia, namely the Russian financial services sector,鈥 a statement said. Both firms offer coverage against shipowners鈥 risks including oil spills and collisions, according to data on their websites.

An updated U.K. list also includes 30 previously unsanctioned vessels 鈥渋nvolved in carrying oil or oil products that originated in Russia from Russia to a third country,鈥 a separate statement said.

Western nations and their allies have imposed several rounds of sanctions against the Russian oil industry, aiming to curtail the flow of petrodollars into the Kremlin鈥檚 coffers and, with it, funding for the war in Ukraine.

As part of the package, the West imposed price caps on Russian exports of crude oil and petroleum products. While most countries are free to buy the cargoes at a higher price, they cannot access such western services as shipping and insurance if they do so.

Russia has been able to ignore the restrictions by shipping its oil at tankers operated by state-run聽Sovcomflot PJSC聽and amassing a so-called shadow fleet with opaque ownership. Vessels carrying the nation鈥檚 energy cargoes have also been聽turning to Russian insurance providers, and even to insurers registered in third countries like Cameroon and Kyrgyzstan.

To reduce Moscow鈥檚 options for workarounds, western allies have sought to sanction individual tankers, making it riskier for oil buyers to use those ships.

The U.K., an international hub for marine insurance, has also been blacklisting key Russian providers of the coverage.

In 2022, just days after the invasion, Britain聽sanctioned聽Gas Industry Insurance Company Sogaz, in 2023 it聽blacklisted聽Russian National Reinsurance Co., which provides state-backed coverage for domestic risks, including reinsurance of vessels and marine cargoes.

In June, the U.K. imposed sanctions on Ingosstrakh Insurance Co., Russia鈥檚 top provider of cover against marine risks including oil spills and collisions.

AlfaStrakhovanie Group Plc and VSK ranked second and fourth among Russia鈥檚 providers of property and casualty insurance in the first half of this year, according to聽data聽from the Moscow-based Expert RA rating agency.

Today鈥檚 measures mean all top five Russian insurers of such risks have been blacklisted in the U.K.

Of the 30 ships added by the U.K., 14 had already been sanctioned by either the U.S. or the EU. London has now targeted a total of 73 vessels.

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