The U.K. government has intensified its sanctions against Russia’s energy sector, targeting both the nation’s oil transportation network and insurance providers. On Monday, the British government expanded its sanctions list to include dozens of oil tankers and two Moscow-based insurance firms, AlfaStrakhovanie Plc and VSK. The Russian government has identified these companies as integral to the Russian financial services sector, which holds strategic significance. The new measures prohibit any cooperation with these insurers, who offer coverage for maritime risks such as oil spills and collisions.
30 previously unsanctioned vessels are now part of the updated sanctions list. These tankers have been involved in transporting Russian-origin oil and petroleum products to third countries. This move aligns with the broader efforts of Western nations and their allies to curb Russia’s oil revenues, a critical source of funding for the Kremlin’s military operations in Ukraine.
Since the onset of the war in Ukraine, Western allies have implemented multiple rounds of sanctions targeting Russia’s oil industry. Central to these efforts are price caps on Russian crude oil and petroleum products. While countries can purchase Russian oil above the cap, they cannot access essential Western services such as shipping and insurance if they do so. These measures aim to restrict Moscow’s ability to generate significant income from its oil exports.
Despite these restrictions, Russia has managed to bypass some of the limitations through creative measures. State-run Sovcomflot PJSC operates a fleet of tankers used to transport Russian oil. Additionally, Russia has built a “shadow fleet” of vessels with unclear ownership details. These ships, often insured by Russian companies or firms registered in third countries like Cameroon and Kyrgyzstan, allow Moscow to continue its oil trade outside the scope of Western sanctions.
To counteract these workarounds, Western allies have focused on sanctioning individual tankers and insurers, thereby increasing the risks for buyers of Russian oil. As a global hub for marine insurance, the U.K. has played a significant role in these efforts, blacklisting key Russian insurance providers. Shortly after Russia’s invasion of Ukraine in 2022, the U.K. sanctioned the Gas Industry Insurance Company Sogaz. Sanctions against the Russian National Reinsurance Co., a state-backed entity that reinsures vessels and marine cargoes, followed in 2023.
In June 2023, the U.K. expanded its measures to include Ingosstrakh Insurance Co., Russia’s largest provider of marine risk coverage, including oil spill and collision insurance. With the addition of AlfaStrakhovanie Plc and VSK to the blacklist, the U.K. has now sanctioned all of the top five Russian insurers in the property and casualty sector. Data from Expert RA, a Moscow-based rating agency, shows that AlfaStrakhovanie Plc and VSK ranked second and fourth, respectively, among Russia’s top providers in the first half of the year.
These sanctions reflect an ongoing strategy by Western nations to reduce Russia’s ability to navigate around restrictions. By targeting both the vessels transporting Russian energy products and the insurers supporting these operations, the U.K. aims to disrupt Moscow’s energy trade further. This comprehensive approach makes it increasingly risky for oil buyers and transporters to rely on sanctioned Russian entities or vessels, tightening the economic pressure on the Kremlin.
The sanctions are part of broader international efforts to isolate Russia economically and limit its capacity to fund the war in Ukraine. The U.K.’s proactive measures in blacklisting insurance providers and sanctioning individual vessels underscore its pivotal role in the global fight to restrict Russian oil revenues. With these latest actions, the West continues to demonstrate its commitment to undermining Moscow’s strategic capabilities and financial stability.
