The European Union intends to prohibit the provision of services for Russian oil transportation

The EU recommends prohibiting ships and firms from providing services connected to the transit of Russian oil around the world, including insurance. The importance of vessel insurance in the delivery of commodities cannot be overstated. Ship owners insist on so-called protection and indemnity insurance, which covers losses up to billions of dollars in the event of an oil spill.

Trade may be halted if some shipments cannot be covered. In the previous century, insurance has been one of the most prominent tools employed by the US and Europe to limit Iranian oil exports.

The proposals forbid transportation, including ship-to-ship transshipment. Tankers are currently being loaded in Russia without a specific final destination in order to conceal the oil’s Russian origin.

Oil is pumped from tanker to tanker, creating a “mixture,” which can be exploited to get over sanctions. Shell, a British-Dutch firm, will buy oil if the proportion of Russian oil in the mix is less than half. It can be sold to American corporations legally in this situation.