Turkey Sees Tanker Traffic Jam After Insurance Rules Change

As many as 19 tankers were waiting to cross Turkish waters on Monday. File Image / Pixabay

Turkey has seen a queue of tankers building up waiting to cross its waters after the country changed its rules on insurance for shipping.

Turkey has issued a notice requiring all ships transiting or entering Turkish waters from the start of this month to provide letters of confirmation from a P&I Club stating that cover will remain in place 'under any circumstances', insurance provider Skuld said in an emailed statement on Monday.

"The International Group has assessed this issue in detail and, at the time of writing, it has been agreed that Clubs cannot and should not issue such a letter to their Owner or Charterer members," Skuld said in the statement.

"The Turkish Government's requirements go well beyond the general information that is contained in a confirmation of entry letter.

"It requires a P&I Club to confirm that cover will not be prejudiced under any circumstances, including where there is a sanctions breach on the part of the assured, whether knowingly and intentionally or unknowingly and unintentionally.

"Issuing a confirmatory letter under these circumstances would expose the Club to a breach of sanctions under EU, UK and US law and as such the Clubs cannot comply with the Turkish Authority's request."

As many as 19 crude tankers were waiting to cross Turkish waters on Monday after the new rule came into effect, the Financial Times reported, citing data from shipbrokers, oil traders and satellite tracking services.

The rule change has been prompted by the new global price cap on Russian oil exports and the requirement not to provide insurance or other services to ships flouting it.

"The imminent introduction of this new Russian oil waiver programme is at heart of the request for letters of confirmation from P&I Clubs stating that the provision of a Member's P&I cover will not be subject to the Rules on cover, sanctions clauses or other exclusion clauses that could result in the withdrawal of cover even when it transpires that damage has been caused by a sanctioned cargo," Skuld said.

"For this reason, Clubs cannot provide such letters.

"Clearly, Members will be keen to continue voyages through Turkish controlled international straits and waters.

"However, the problem currently faced by Members arises directly from the prohibitions that the EU, UK and US have introduced on Russian oil.

"It should be noted also that there is a grace period on oil cargoes from Russia loaded before 5 December, which expires on 19 January."