Complications with oil tankers backed up in the Black Sea

The G7 and the EU have executed price caps on Russian oil imports. For ships carrying Russian oil, this means that they can’t get insurance and other services from Europe unless that oil is bought for US$60 a barrel or less.

Now, Turkey is worried about accidents and oil spills involving uninsured ships. So, authorities haven’t been letting ships go through Turkish waters without showing that they’re insured. As a result, the Black Sea is getting kind of jammed with oil tankers. On Friday, 28 ships were stuck there waiting to get through the Turkish straits. If ships continue to be stuck, global supply would get all messed up and energy prices could go crazy.

But, on Monday, four tankers are supposed to be allowed to pass through, and five tankers have been removed. The four that can go through showed necessary documents to prove insurance, and the other five failed to do so. One shipping official said ships were beginning to pass through, suggesting Turkey has worked out issues with documentation. Sunday’s port agent listing showed 19 tankers still waiting to pass.

Key comments:

"It is absolutely required for us to confirm in some way that their [protection and indemnity] insurance cover is still valid and comprehensive," said Turkey's maritime director general Ünal Baylan last month.

"(It) is out of the question for us to take the risk that the insurance company will not meet its indemnification responsibility," said Turkey's maritime authority.

"We are therefore in contact with the Turkish authorities to seek clarifications and are working to unblock the situation," said an EU Commission spokesman on Friday, saying the delays were unrelated to the price cap and the verification process was business as usual.