The price cap imposed by the leading industrialized countries (G7) on Russian oil transported by sea is apparently showing its first side effects. At least 20 oil tankers are piling up in Turkish waters to cross the Bosphorus from Russia’s Black Sea ports to the Mediterranean, a shipping industry insider told Reuters.
More delays are expected in the coming days as operators scramble to buy insurance under the G7’s new price caps. From Monday, shipping companies in the EU will only be allowed to transport Russian crude if it is sold below or near the G7 price cap of $60 (57 euros) per barrel.
This also applies to insurers, reinsurers or other financing of the oil business. Since the world’s largest shipping and insurance companies are based in the G7 countries, the price cap could make it difficult for Russia to sell its oil at a higher price.
Turkey: “Will suffer further delays”
Every day, millions of barrels of oil are transported from Russian ports through the narrow Turkish strait on the Bosphorus to the Sea of Marmara and then through the Dardanelles to the Mediterranean. Turkish maritime authorities issued a notice last month demanding additional guarantees from insurers covering passage through the Bosphorus from December 2. “We will see further delays if owners or operators are unable to provide the necessary guarantees,” an insider said.
Average waiting time of four days
The average waiting time on the Bosphorus Strait southbound is currently four days for ships over 200 meters in length, compared to one day in mid-November. According to the GAC shipping agency, 13 ships were waiting to cross the Bosphorus in a southerly direction – all of them oil tankers, ten of which have been filled with crude oil after loading at the Russian port of Novorossiysk. According to shipping company Tribeca, there are also nine oil tankers waiting to sail further south through the Dardanelles.
With the price cap, the EU, the G-7 countries and Australia want to put financial pressure on Russia in the war against Ukraine. Moscow is heavily dependent on revenue from commodity trading.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
