Why did Turkey organize a traffic jam from tankers in its waters

Expert: “This is a clear element of bargaining over Russian oil”

The price ceiling for Russian oil at $60 per barrel, which entered into force on December 5, designated Turkey as a clear beneficiary. Not failing to take advantage of the moment, she skillfully created an artificial jam of tankers off her shores. Ankara has demanded written confirmation from insurance companies that oil tankers are able to safely pass through Turkish waters. The true motive is to “weld” on this situation as much easy money as possible.

This is a letter confirming the provision of P&I insurance (Protection and Indemnity Insurance) to the tanker in the event of crude oil spills and ship collisions. At the same time, the international group P&I Clubs, which insures the risks of 90% of the world’s shipping, said that Ankara’s request “goes far beyond” the usual requirements. And this is an extremely eloquent reaction. On Monday, December 5, 19 tankers were waiting to cross Turkish waters. They anchored near the Bosphorus and the Dardanelles, two straits that connect Russia’s Black Sea ports with international markets.

According to the Financial Times, these are mainly Turkish-flagged tankers with Western insurance coverage, but there are also a few Russian ones. Meanwhile, according to the newspaper, Russian insurance companies have already provided the authorities in Ankara with the required documents. According to the Marinetraffic service, on December 6, six vessels from the Russian Federation got stuck in a traffic jam in front of the Bosphorus Strait – Kapitan Barmin, General Skobelev, Lady Maria, Lady Aria, Caminero, Roschem 2.

Meanwhile, Deputy Minister of Transport of the Russian Federation Alexander Poshivay said earlier that Turkey, as well as India and China, recognize Russian insurance for sea freight. But not all types: specific conditions are determined by intergovernmental agreements, says Artem Deev, head of the analytical department at AMarkets. According to him, in this particular case, there was no preliminary agreement between Moscow and Ankara. Oil buyers generally recognize the insurance of international companies, most of them based in the UK and the US. Without such a document, the vessel cannot leave the port of the sending country.

“It looks like Ankara is “laying a straw”: tankers have insurance coverage, but the authorities require additional confirmation that the transportation of raw materials meets all the standards associated with the Russian oil price ceiling that came into force on December 5,” says Deev. – This does not bode well for the world oil market. The risks of a global raw material imbalance and shortage will only grow, and the point is not only that ships from the Russian Federation do not receive insurance from Western companies. The cost of insurance itself is also increasing: even Russian and Asian organizations cannot take on all the risks of insurance coverage. For example, such as the oil spill, which will cost $500 million.”

There is another problem – the growing lack of capacity to transport Russian oil. For example, carriers from Greece today flatly refuse to deal with it. At the same time, according to the Western press, Moscow has purchased more than a hundred tankers, but mostly these are vessels with a long (over 10-15 years) service life. It is difficult for them to find an insurer, since the risks of a technical nature are too high (the same oil spill due to the deterioration of the hull). According to Deev, the situation is fraught with the almost complete disappearance of Russian oil from the market and, as a result, a global shortage of raw materials and rising prices.

“In pursuit of its own benefit, Ankara has repeatedly artificially created “traffic jams” in the Bosporus and Dardanelles,” says Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation. – There were cases when ships with 1 million barrels on board stood in line at once. And today, Turkey is clearly trying to cash in on a situation with a simultaneous embargo on the sea transportation of Russian oil and a price ceiling. After all, all tankers “stuck” in the straits are already insured, and this insurance was valid before, before the new restrictions came into force. Under the terms of the sanctions, tankers that were loaded before December 5 can safely move and ship oil from the Russian Federation to ports under the old rules.”

Having come up with a pretext for additional checks, Ankara is simply trying to make money on intermediary services, to get Moscow to sell it more raw materials. Which in the future it will reload onto its tankers and re-export at world value. Such a product changes its owner, which means that the price limit does not apply to it. According to Yushkov, because of the current traffic jam, Russia will have to speed up all processes for loading, unloading and delivering oil, and in the face of an acute shortage of tankers, this will be extremely difficult to do. From the point of view of international norms, Turkey generally has no right not to allow ships to pass through its straits on the grounds that there is no insurance. On its part, this is a clear element of bargaining – in terms of discounts and volumes of raw materials for Turkish companies.