A former Cabinet minister has called on the insurance industry to think on its obligations after it was revealed that UK firms have insured over €120bn worth of Russian oil.
From March 2022, just after Russia’s invasion of Ukraine, until the end of November 2023, the UK insured €120.6bn worth of Russian oil, according to an analysis by the Centre for Research on Energy and Clean Air (CREA).
The CREA analysis is focused on the months between March 2022 and November 2023. It is not illegal to transport Russian oil, or insure it, as long as the black gold is sold for less than $60 a barrel.
CREA revealed that 33 per cent of all Russian oil (by volume) was transported on tankers insured in the UK.
Of that, the majority of the Russian oil was crude oil (31 per cent worth €14.4bn), followed by diesel (22 per cent worth €10.3bn).
Alun Cairns, the former Welsh secretary and still Tory MP, said firms must be alive to the possibility that the price cap could be abused.
The analysis noted that while there has been a decrease in insurance companies from the UK covering shipments of Russian crude, Russian oil transits still remain highly reliant on vessels insured in the UK for transport.
In the 12 months since the oil price cap was introduced in December 2022, €46.4bn of Russian oil has been transported on tankers using UK protection and indemnity (P&I) insurance.
The West of England P&I Club covered the highest value of Russian oil products at €20.1bn, followed by NorthStandard at €17bn. North and Standard insurance merged to become NorthStandard in February 2023.
Source Centre for Research on Energy and Clean Air (CREA)
This comes after Kpler shared data with City A.M. earlier this month that shows that last year was the most active drilling year for Russia through the first 11 months, with a total depth of 28,100 km.
The CREA’s analysis stated that “Russia’s reliance on UK insurance to transport their oil provides the UK with significant leverage which they can use to lower the price cap, and implement better monitoring and enforcement that would considerably lower Russia’s oil export revenues.”
“It also shows the somewhat posturing nature of the support and aid that the UK provides to Ukraine, while at the same time supporting Russia’s ability to fund the invasion by conducting its oil trade easily and globally.”
Cairns has raised the issue of Russian oil shipping in Parliament several times.
He told City A.M., that it took the USA seven years to close all the loopholes on Iranian oil shipping after it instigated sanctions.
“I’m concerned that the same focus isn’t there from the international community when it comes to the Russian oil exports,” he said.
“[In the UK] there needs to be greater coordination between the Ministry of Defence, the Department of Business and Trade, the Treasury and the Cabinet Office.
“There’ll always be someone or an organisation seeking to exploit opportunities. I will be very disappointed if there are UK insurance companies participating in that illicit market,” he added.
West of England P&I Club and NorthStandard were contacted for comment.
