UK expands sanctions against Russian oil fleet and its insurers

(Bloomberg) - The UK government expanded its sanctions against Russia’s energy industry on Monday, blacklisting dozens of tankers responsible for moving the nation’s 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 “carrying on business in a sector of strategic significance to the Government of Russia, namely the Russian financial services sector,” a statement said. Both firms offer coverage against shipowners’ risks including oil spills and collisions, according to data on their websites.

An updated UK list also includes 30 previously unsanctioned vessels “involved in carrying oil or oil products that originated in Russia from Russia to a third country,” 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’s 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 Sovcomflot PJSC and amassing a so-called shadow fleet with opaque ownership. Vessels carrying the nation’s energy cargoes have also been turning to Russian insurance providers, and even to insurers registered in third countries like Cameroon and Kyrgyzstan.

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

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

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

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

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

Today’s measures mean all top five Russian insurers of such risks have been blacklisted in the UK.

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