“The EU announced a worldwide ban on the provision of maritime insurance to vessels carrying Russian oil two months ago, expecting co-ordinated action with the British government. However, the UK is yet to introduce similar restrictions. UK participation is pivotal to the effectiveness of any such ban because London is at the centre of the marine insurance industry,” the FT reported.
Brussels in late July amended some curbs on dealing with state-owned Russian companies, citing concerns over global energy security, according to the FT.
“…US officials have expressed concern that an immediate global ban on maritime insurance would push up prices by pulling millions of barrels of Russian crude and petroleum products off the market.”
The EU’s insurance ban was introduced on June 4 and remains in place. It prevents companies in the bloc from writing new insurance for any vessel carrying Russian oil anywhere, according to the FT report.
“Existing contracts remain valid until December 5, when all such business will be banned. However, the EU has amended part of its own sanctions to permit European companies to deal with some Russian state-owned entities, such as Rosneft, for the purpose of transporting oil to countries outside the bloc.”
European companies will no longer be blocked from paying the likes of Rosneft, “if those transactions are strictly necessary”, for the purchase or
crude or petroleum products to third countries, a European Commission spokesperson told the FT.
Meanwhile German inflation may well exceed 10% by the end of the year if gas supplies from Russia are cut off, Deutsche Bank head Christian Sewing said in an interview with the Frankfurter Allgemeine Sonntagszeitung, published on Saturday.
“If Russian gas continues to flow [into Germany], we should reach an inflation rate of around 8% by the end of this year. But inflation would be higher if the gas stopped flowing. Then 10% or more is possible,” Sewing said.
The CEO pointed out that losing gas supplies from Russia “would have a significant impact on economic growth in Germany” and the country “will definitely slip into recession.”
He noted that “with the right interest rate hikes and the right policies, there is still a chance to bring [inflation] down to 5-6% next year, and then get close to the actual target of 2% again in 2024.” However, such measures “will take time, so we should not give people false impressions,” he added.
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