Currency
Insurance companies helped Russia circumvent sanctions. Source: Created with the help of AI
Despite the sanctions and ongoing attempts to bring down Russia's economy, Western companies continue to insure tankers used by the aggressor country to export its oil. It turned out that they rely only on letters in which Russian companies can lie about compliance with sanctions.
According to Reuters, Western insurance companies covered insurance risks for tankers carrying Russian oil after the G7 set a price ceiling on it. In 2022, to hit Russia's ability to finance the war against Ukraine, Western insurers and ships were allowed to participate in the trade of Russian oil only if it was sold at a price below $60/barrel.
Despite this, Russia banned oil and gas companies from complying with the restrictions and continued to sell raw materials through its ports on the Baltic Sea to Asia. The average price of oil amounted to $69.4 per barrel.
In total, Western insurers have signed contracts with 10 Russian tankers: one vessel was insured by Gard (Norway) and two more by American Club (USA) and West of England (Luxembourg). It is known that they insured Gioiosa and Orion I, which delivered Rosneft oil to China in early 2024.
The American Club claims that when providing coverage for Gioiosa, they did not have access to information about the price of oil. Gard representatives claim that they relied on confirmation of the price cap and checked additional sources of data and information.
The insurance companies emphasized that they make decisions on which merchant ships to insure based on letters from cargo operators regarding the legality of their operations and compliance with Western sanctions. The journalists' questions about the restrictions were forwarded to the International Group (IG) of P&I clubs, which provides insurance for 90% of the world's fleet.
As previously reported by OBOZ.UA, Russia managed to redirect oil exports to India and China, which allowed it to increase oil and gas revenues in June by more than 50% compared to last year, to 814 billion rubles ($9.4 billion). This demonstrates the effectiveness of Russia's strategy to circumvent Western sanctions.
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