Turkey refused external pressure to force it to pass oil tankers in its territorial waters, given the failure to provide appropriate letters of insurance, in addition to the need for the Maritime Authority to conduct additional checks. The number of oil tankers waiting in the Black Sea has reached a total of 28 ships, according to Reuters, citing the Tribeca Shipping Agency. This comes at a time when the United States confirmed that the price ceiling applies only to Russian oil, which does not cause a queue of ships in Turkish waters, according to information monitored by the specialized energy platform.
Oil tankers queue
The number of oil tankers waiting to cross the Bosphorus Strait in Istanbul on its way to the Mediterranean rose to 19 from 16 earlier today, Thursday (8 December), in addition to 9 other tankers in the Dardanelles. Tribeca cited in its tally that tankers longer than 200 meters are waiting north of the Bosphorus Strait, and said that there was no specific time for the crossing. The agency said that 9 tankers were waiting to cross south in the Dardanelles Strait, down from 12 the previous day. Three tankers were scheduled to pass through this strait on Thursday, two on their way from the Russian port of Tuapse to the Emirati port of Fujairah, and one on their way from the Turkish city of Tuzla to the Egyptian city of Sidi Kerir.
Russian oil price cap
The oil tankers had crowded in Turkish waters after the Russian oil price ceiling came into effect, set at $60 a barrel, and the authorities in Ankara demanded that insurance companies pledge that any ships sailing in its strait are fully covered. The Group of Seven major countries, the European Union and Australia have agreed to prevent shipping service providers – such as insurance companies – from helping to export Russian oil unless it is sold according to the price ceiling, to prevent Moscow from energy revenues to finance its war in Ukraine.
However, Turkey has a separate procedure in effect on December 1 (2022); Which caused trouble. The Turkish authorities have introduced new requirements, stating that every vessel must have insurance cover for all circumstances when sailing through Turkish waters or when anchored in ports. However, the P&A Club group – which represents 13 mutual insurers – said the Turkish request “far exceeded” the public information normally required, stressing that coverage could not be guaranteed even in the event of sanctions being breached. One participant in the oil industry explained that Russian insurance companies submitted letters of confirmation to the Turkish authorities, in order to secure passage through its waters, but that it was the shippers who had insurance from Western service providers who were stopped.
Millions of barrels stuck
For its part, shipping data – compiled by Bloomberg Agency – showed that 26 tankers carrying more than 23 million barrels of oil from Kazakhstan were unable to cross the Bosphorus and Dardanelles straits until Wednesday (December 7). The Turkish Straits are vital choke points for the flow of crude oil and other commodities from the Black Sea. Kazakh authorities estimated fewer stranded oil tankers; While the Turkish Ministry estimated the number at 15 tankers. US and British officials are pressing Turkey to reconsider the requirement for proof of insurance, especially given that shipments from Kazakhstan are not subject to sanctions.
“Unacceptable” pressure
The US Treasury said that US Deputy Secretary of the Treasury Wali Adimo told Turkish Deputy Foreign Minister Sedat Onal – in a call on Wednesday – that the price ceiling applies only to Russian oil, and does not require additional inspections on ships passing through Turkish territorial waters. “The two officials highlighted their shared interest in preserving global energy markets well-supplied by creating a simple compliance regime that allows seaborne oil to pass through the Turkish Straits,” the Treasury said in a statement. In Ankara, the General Directorate of Maritime Affairs said it was unacceptable to pressure Turkey over what it described as “routine” security checks in its waters. The DOT also said it could remove tankers from its waters without proper documentation, or ask them for a new letter of insurance from the P&A Club covering their journey through its territory.
Turkish clarification
Turkey said it was “unacceptable” that P&I clubs – which insure against risks including collisions and spills – did not provide confirmation letters to their commercial clients. And the Turkish Ministry of Transport stated that “the letter we requested relates only to confirming that the ship’s insurance is valid while it is passing through the straits,” according to what was reported by Bloomberg Agency. The ministry indicated that Turkey is working on a separate solution for ships that do not carry messages destined for Turkish refineries, citing “the public interest and the national interest.” Until now, the traditional way to check insurance was via insurance companies’ websites, which are constantly being updated. But recent European sanctions stipulate that a ship carrying Russian oil only has an industry standard cap if its cargo is purchased at $60 a barrel or less.