Ministry of Energy reported problems with insurance of coal exports from Russia

After the entry into force of the EU ban on the purchase of Russian coal, producers faced problems with exports, declared RBC Deputy Energy Minister Sergei Mochalnikov. European insurance companies, due to sanctions, began to refuse to work with domestic coal exporters.

“A clarification has been issued that prohibits European companies from insuring, reinsuring ships with Russian coal that are moving in any direction, not only to Europe, this is seriously affecting [на экспорте]”, – he said.

In early April, the EU included in the fifth package of sanctions against Russia because of the SVO in Ukraine an embargo on the import of Russian coal. It has banned deliveries from Russia under long-term contracts since August 10, and spot purchases, according to Reuters, were stopped immediately after the restrictions were introduced.

How wrote Bloomberg, citing sources, one of the main exporters of coal from Russia, the company SUEK, has stopped shipping fuel since mid-August, as companies from the EU, the UK and Switzerland operate in the insurance and reinsurance markets. The European Union has previously explained that restrictions on Russian coal include, among other things, a ban on insurance for such cargo.

According to Mochalnikov, Russian companies “should be given a little time” to search for new supply chains. The Deputy Minister at the same time predicts an increase in prices for Russian coal in new markets.

In anticipation of the embargo on coal imports from the Russian Federation, the EU countries increased his supplies. In March-May 2022, the block purchased 28% more coal than in the same period last year. Deliveries amounted to 29.4 million tons, according to Vedomosti’s calculations based on UN Comtrade data. In monetary terms, deliveries in March-May increased by 3.9 times to $9.3 billion. According to UN Comtrade, Germany, Poland, Spain, Italy and the Netherlands were the main coal importers.

Russia in July redirect all export volumes of coal from European countries to China and India falling due to EU sanctions. Due to this, deliveries abroad remained almost unchanged compared to the previous month, according to an expert review of the Center for Energy Development (CRE).