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Russia mulls creating of independent oil insurance system with friendly states — Deputy PM

8 June 2023 21:40 (UTC+04:00)
Russia mulls creating of independent oil insurance system with friendly states — Deputy PM

Russia is considering the possibility of creating a new system of clubs of mutual insurance and reinsurance of risks to third parties with friendly states to supply Russian oil to the world market, Deputy Prime Minister Alexander Novak wrote in an article for the Energy Policy magazine, Azernews reports, citing TASS.

"For the unhindered access of Russian oil raw materials to the markets, the possibility of creating a new system of clubs of mutual insurance and reinsurance of risks to third parties (P&I insurance) is being considered with friendly states. Its main advantage is independence from the insurance and banking services of unfriendly countries, stability and scalability for all types supplies," he said.

According to Novak, important components of the proposed system are the issues of payment processing and the confidentiality of participants.

"The new mechanism will not be subject to risks in the form of illegal sanctions restrictions. As part of the creation of an alternative cargo transportation insurance system, there is great potential in terms of using a bank guarantee instead of insurance to cover the liability of cargo carriers," Novak said.

As part of the introduction of a price ceiling for Russian oil of $60 per barrel, the EU countries have established a ban on insurance and other financial and technical assistance to ships carrying Russian oil at higher prices.

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