A group of Western insurers has stated that a Russian oil price ceiling has become unenforceable, forcing more ships to join a shadow fleet, in one of the toughest rebukes to the move intended to reduce income to the Kremlin.

The G7 group of industrialised nations accepted a so-called price ceiling for Russian oil after Washington campaigned to limit the Kremlin’s earnings during the Ukraine conflict while keeping Russian oil flowing to avert an energy price surge.

The cap permits Western shippers and insurers to engage in Russian oil trade as long as oil is sold for less than $60 per barrel.

According to the International Group of P&I Clubs, the price cap has had little effectiveness since its introduction two years ago, since Russia has turned to its own fleet as well as ships that are not subject to Western monitoring.

The declaration was presented as written evidence before a UK parliamentary committee on Tuesday. The association claims to include 12 marine third-party liability insurers that cover 87% of the world’s ocean-going tonnage.

“The oil price restriction looks to be more unenforceable as more ships and related services enter this parallel trade. We anticipate that about 800 ships have already left the International Group Clubs as a direct result of the implementation of the oil price cap,” the statement added.

(Adapted from Reuters.com)

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