The deepening of the oil crisis in Turkey provokes Russia’s oil sanctions

  • Oil buildup and tankers worrying
  • Turkey says out of the question to take insurance risk
  • Yellen says that oil from Kazakhstan should not be targeted
  • Ankara says most of the waiting ships are European Union ships

ISTANBUL (Reuters) – Turkey has emerged as a stumbling block in a complex international plan to deprive Russia of wartime oil revenues, as the number of tankers waiting to exit the Black Sea through the Turkish straits continued to rise on Friday.

Ankara has refused to scrap the new insurance check rule it implemented at the beginning of the month, despite days of pressure from Western officials frustrated with the policy.

Shipping agency Tribeca said on Friday that a total of 28 oil tankers are in line seeking to leave the Bosphorus and Dardanelles.

Wealthy G7 countries, the European Union and Australia have agreed to prevent shipping providers, such as insurance companies, from helping to export Russian oil unless it is sold at a low price, or a cap, with the aim of depriving Moscow of war revenues.

The Turkish Maritime Authority said it will continue to turn away oil tankers from waters that lack proper letters of insurance.

Western insurers said they could not provide the documents required by Turkey because they could be subject to penalties if the oil shipments they cover were found to have been sold at prices above the cap.

The Turkish authority said that in the event of an accident involving a vessel in violation of the sanctions, an international oil spill fund would likely not cover the damage.

“(It is) for us to take the risk that the insurance company will not fulfill its liability for compensation,” she said, adding that Turkey is continuing talks with other countries and insurance companies.

She added that the vast majority of ships waiting near the strait were EU ships, with a large part of the oil destined for EU ports, a factor that frustrated Ankara’s Western allies.

The ship backlog is causing increasing unease in the oil and tanker markets. Millions of barrels of oil move south every day from Russian ports through the Bosphorus and Dardanelles in Turkey to the Mediterranean Sea.

Kazakh oil

Most of the oil tankers waiting in the Bosphorus Strait carry Kazakh oil, and Treasury Secretary Janet Yellen said Thursday that the US administration sees no reason to subject such shipments to the new Turkish procedures.

She added that Washington had no reason to believe that Russia was involved in Turkey’s decision to prevent the ships from crossing.

The European Commission said on Friday that the delays had nothing to do with the price cap and that Turkey could continue checking insurance documents “in the same way as before”.

“Therefore we are in contact with the Turkish authorities for clarifications and are working to resolve the situation,” a spokesman told Reuters.

Turkey has balanced good relations with both Russia and Ukraine since Moscow invaded its neighbor in February. It played a key role in a United Nations-backed agreement reached in July to free up grain exports from Ukraine’s Black Sea ports.

But relations between NATO allies Ankara and Washington have at times been tense, with Turkey last month renewing calls for the United States to stop supporting Syrian Kurdish forces.

The Biden administration imposed sanctions on Thursday on prominent Turkish businessman Setke Ayan and his network of companies, accusing him of acting as a facilitator of oil sales and money laundering on behalf of Iran’s Revolutionary Guards.

Additional reporting by Darren Butler and Ceaser and Jonathan Saul were in London; Writing by Noah Browning; Editing by Himani Sarkar, Clarence Fernandez, Jonathan Spicer and Frances Kerry

Our standards: Thomson Reuters Trust Principles.

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