Nikkei: Japan to stop insuring ships in Russian waters against war damage

From January 1, Japan will no longer insure ships against military damage in Russian waters. Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance began informing shipowners of their decision on December 23, informs the Nikkei newspaper.

Such a decision, according to the newspaper, was made after the refusal of foreign companies involved in reinsurance to take on “risks associated with Russia.”

The Japanese insurers’ decision means that war damage coverage will not be available anywhere in Russian waters – not even in the Far East.

The inability to provide insurance coverage may have a negative impact on the supply of liquefied natural gas, including within the framework of the Russian project “Sakhalin-2“. Japanese insurers are expected to negotiate with foreign companies after the Christmas holidays about a possible renewal of insurance coverage.

On December 5, a ban on the supply of Russian oil by sea to the EU countries came into force. In addition, a price ceiling was introduced for Russian energy resources at $60 per barrel. This restriction was approved by the G7 countries, as well as the EU countries and Australia. At the Japanese Foreign Ministry then reportedthat the price ceiling for Russian oil will not affect crude oil produced under the project “Sakhalin-2“. Japan joined the restriction of prices for Russian oil, however, raw materials produced under the Sakhalin-2 project will not fall under this measure. The diplomatic mission explained that the exception was introduced to ensure Japan’s energy security. It is clarified that the ceiling price for oil will not apply to deliveries, contracts for which were concluded before December 5, provided that the oil is shipped in Japan before January 19, 2023.