The EU price cap on Russian oil is already disrupting the market - tankers are piling up off Turkey after Ankara demands insurance paperwork
- The EU's price cap on Russian crude and its ban on seaborne Russian crude kicked in Monday.
- Oil tankers have begun piling-up off Turkish shores, as Ankara demands proof of insurance coverage.
- Shipping insurers rejected the request, as Turkey's asking for coverage that could expose them to a breach of sanctions.
A European Union price cap on Russian oil kicked in on Monday and it's already causing shipping disruption — oil tankers are piling up off the coast of Turkey as Ankara is demanding paperwork that the vessels are fully insured, according to the Financial Times.
The pile-up comes just as an EU price cap of $60 a barrel price cap for Russian crude kicked in.
As 90% of the world's shipping insurance is provided by a group largely based in Europe, the aim is to curb Russia's oil revenue by limiting how much coverage the insurers can provide — that's because only those vessels carrying cargo priced below the EU cap can access Western maritime insurance.
But the Turkish government wants full insurance coverage for the ships — resulting in a standoff and traffic jam of 19 crude oil tankers waiting to cross Turkish waters, according to the FT which cites ship brokers, oil traders, and satellite tracking services.