England (Commonwealth Union)_ The UK government has proposed legislation that forbids the shipping of Russian oil through UK insurance services unless the cargo is bought below the current G7 price ceiling. The action comes in response to the G7 finance ministers’ decision in September to impose a price ceiling on Russian oil exports, allowing third-party nations outside the G7 to continue purchasing Russian oil at competitive rates. The UK and its coalition allies, who have already decided to prohibit the purchase of Russian crude, are exempt from the quota. The amount of the price ceiling has not yet been determined and is now up for debate.
The prohibition encompasses shipbroking, as well as other shipping services. It goes into effect on 5 December for Russian crude exports and on 5 February 2023 for refined oil products. The UK government said in a statement that the ban on services, which includes insurance, brokerage and shipping, will be coupled with a general license that will serve as the foundation for an oil price cap exception that will only permit third countries to continue accessing services if they are purchasing Russian oil at or below the cap.
The UK emphasized the crucial function that UK P&I insurers provide in the shipping of oil by sea. According to the report, more than 60% of the sector’s insurance is provided by P&I insurers with headquarters in the UK.
The G7 price ceiling prohibition will also apply to non-UK P&I insurers who conduct business in the European Union. The UK restriction will also apply to other maritime insurance products offered by the London Company and the Lloyd’s of London market, such as hull and machinery and cargo coverage.
One of the top markets for marine insurance is in London.
