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Turkey will require tankers carrying petroleum products through the Turkish straits to have a valid Protection and Indemnity (P&I) insurance cover as of February 6, a day after the EU embargo on seaborne imports of Russian oil products comes into effect.
The EU hopes to have in place price caps on Russian petroleum products in time for the embargo. Similarly to the $60 per barrel price cap on Russian crude, a price cap on products would allow buyers to use Western insurance services if they buy the products at or below the set price caps.
Turkey is already demanding proof of P&I cover for crude oil tankers passing through the Turkish Straits, which created a massive traffic jam in the narrow straits at the beginning of the EU ban on crude imports from Russia on December 5.
Since December 1, Turkish authorities have requested that all oil tankers passing through the Bosphorus and the Dardanelles Strait crossing Turkish territorial waters have proof-of-insurance papers. The new Turkish regulation created a traffic jam of a dozen tankers waiting to cross the Bosphorus and Dardanelles straits, the main waterways linking the Black Sea with the Mediterranean. The traffic jam eased some ten days later after insurers and the Turkish government reached an agreement over a new regulation requiring proof-of-insurance documents.
Now Turkey requires proof of P&I insurance as of February 6, its general directorate of maritime affairs said on Thursday, as quoted by Reuters.
Days before the EU ban is set to kick in, the EU is still at odds over a cap on the price of Russian diesel and other products, with hopes that a deal could be reached on Friday, February 3.
The European Union was considering setting a $100 a barrel price cap on Russian diesel to limit the potential fallout on global supply after the EU ban comes into effect on February 5. The European Commission has also put forward a proposed price cap of $45 per barrel for discounted Russian oil products, such as fuel oil.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.