NEWS Turkish tanker standoff sparks Russian oil sanctions

Turkish tanker standoff sparks Russian oil sanctions
  • Backlog unnerving oil and tanker markets
  • Turkey says no doubt about taking insurance risk
  • Yellen says Kazakh oil should not be targeted
  • Ankara says most waiting ships are EU vessels

ISTANBUL, Dec 9 (Reuters) – Turkey has emerged as a key stumbling block in a complex international plan to strip Russia of wartime oil revenues as the number of oil tankers waiting to leave the Black Sea through the Turkish Strait continued to rise on Friday.

Despite days of pressure from Western officials, Ankara has refused to scrap new insurance inspection rules put in place earlier this month.

A total of 28 tankers were queued to leave the Bosphorus and Dardanelles, the Tribeca shipping agency said on Friday.

Rich G7 countries, the European Union and Australia agreed to bar shipping service providers such as insurance companies from helping export Russian oil unless sold at mandatory low prices or caps, in a bid to deprive Moscow of wartime revenues.

Turkey’s maritime authority said it would continue to ban tankers without proper insurance policies from entering its waters.

Western insurers said they could not provide the documents required by Turkey because they could be sanctioned if oil cargoes they covered were found to be sold at prices above the cap.

The International Oil Spill Fund may not pay damages in the event of an accident involving a vessel violating sanctions, Turkish authorities have said.

“It is impossible (for us) to risk insurance companies not fulfilling their liability,” it said, adding that Turkey was continuing negotiations with other countries and insurers.

It added that the vast majority of ships waiting near the strait were EU vessels, with a large share of oil destined for EU ports – a factor of frustration for Ankara’s Western allies.

Turkey plans to evacuate eight oil tankers without P&I insurance from the Marmara Sea in order to cross the Dardanelles from its waters, Turkish authorities said. The statement said additional measures would be taken to escort the tankers through the Dardanelles following the closure of the Dardanelles to sea traffic.

Four tankers waiting to cross the Dardanelles were due to depart on Saturday, escorted by tugboats, a shipping source said.

A Turkish-flagged tanker, which crossed the Bosphorus on Friday, received a P&I insurance letter from an international P&I Group member insurer after Turkey first requested the letter, the statement said.

The backlog of ships has led to growing unease in the oil and tanker markets. Millions of barrels of oil flow from Russian ports southward through Turkey’s Bosphorus and Dardanelles into the Mediterranean every day.

Kazakh oil

Most of the tankers waiting in the Bosphorus carry Kazakh oil, and U.S. Treasury Secretary Janet Yellen said on Thursday that the U.S. government sees no reason to impose Turkey’s new procedures on such cargo.

She added that Washington had no reason to believe Russia was involved in Turkey’s decision to block the ship’s transit.

The European Commission said on Friday that the delay had nothing to do with the price cap and that Turkey could continue to verify policies “in exactly the same way as before”.

“We are therefore in contact with the Turkish authorities for clarification and are working to lift the blockade,” a spokesman told Reuters.

Turkey has balanced its good relations with Russia and Ukraine since Moscow invaded its neighbor in February. It played a key role in a United Nations-backed deal in July to free up grain exports from Ukraine’s Black Sea ports.

However, relations between NATO allies Ankara and Washington have at times been volatile, as Turkey renewed calls last month for the U.S. to end support for Syrian Kurdish forces.

The Biden administration on Thursday imposed sanctions on prominent Turkish businessman Sitki Ayan and his network of companies, accusing him of facilitating oil sales and money laundering by Iran’s Revolutionary Guard Corps.

Reporting by Daren Butler, Can Sezer and Jonathan Saul in London; Additional reporting by Huseyin Hayatsever in Ankara Writing by Noah Browning Editing by Jonathan Spicer, Frances Kerry and Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

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