Western Insurers Keep Russian Crude Flowing Despite G7 Price Cap

Western insurers continue to cover tankers carrying Russian crude to Asia despite a G7 price cap, using attestation letters to ensure compliance. This practice persists even though the price of Russian crude often exceeds the cap. Insurers justify their actions by relying on attestations from trade participants.

Western insurers are still providing coverage for tankers transporting Russian crude to Asia, defying a G7 price cap aimed at limiting Moscow's ability to fund the war in Ukraine. According to data from traders and shippers, these insurers, including American Club and Norway's Gard, rely on attestation letters to ensure compliance with the price cap.

The cap, imposed in 2022, restricts Western insurers from covering Russian oil trades unless the oil is sold below $60 per barrel. However, Russian crude has been selling well above this limit, raising questions about the effectiveness of the attestation process. Insurers argue that they are providing a necessary service to their members while adhering to legal requirements.

Despite the cap, Russian crude has been selling for an average of $69.4 per barrel at Baltic ports. Insurers like American Club and Gard have stated they would withdraw coverage if the attestation process is found to be inaccurate.

(With inputs from agencies.)