(Repeats to wider audience with no changes to text)
By Jeslyn Lerh and Muyu Xu
SINGAPORE, April 27 (Reuters) - A rise in spot prices
for Russian crude oil to above the $60 per barrel cap imposed by
western powers has made ship insurers even more nervous of
running foul of the rules as they are unable to independently
track the value of cargoes, executives said.
To curb Moscow's oil revenues following the Ukraine war, the
Group of Seven Nations, the European Union and Australia imposed
price caps on Russian crude and oil products from December and
February, respectively.
So long as the prices do not exceed capped levels, companies
involved in trading and transporting the oil can access to
western financial services, ships and insurance.
But, shipping documentation can be filled with false
information and it would be "very difficult for ship owners to
get to the bottom what the actual price was," according to Mike
Salthouse, head of external affairs from NorthStandard P&I Club.
"If Russia wants to export its oil and sell it above the
price of the price cap, then it's in the interests of both the
Russian exporter and the receiver not to release information as
to what the true price of the cargo was," Salthouse told Reuters
on the sidelines of a Singapore Maritime Week event.
The price caps have been effective in depressing prices for
Russian oil, but a jump in global Brent crude prices above $80 a
barrel, has pulled Russian Urals above the $60 a barrel price
cap, while ESPO Blend, exported from the Far East port of
Kozmino, has been trading above $60 a barrel also.
Even before the price caps were imposed, there was no way
for insurers to verify the value of cargoes, which can be
traded multiple times before reaching their destinations.
Lars Lange, secretary general of the International Union of
Marine Insurance said: "We are definitely not able to assess the
oil prices of shipments."
"I get an attestation, which is a compliance with the price
cap, but I know actually that something different is happening
in the background...and this is something where no law can
prepare you for these particular cases."
HEIGHTENED SAFETY RISKS
In addition to risks of violating sanctions, the growing
"shadow or dark fleet" - tankers purchased by states to deliver
Russian oil - has increased safety risks for the shipping
sector, the executives said.
"The shadow fleet is a major risk for all shipowners trading
within the sanction rules," said Rolf Thore Roppestad, chief
executive officer of Gard AS, adding that the risk of colliding
with a ship from the shadow fleet is higher than before.
"I don't have a solution regarding the shadow fleet. But if
we know how big the risk is, we can take some precautions."
More ships could be at risk of losing insurance coverage
because of sanctions, Salthouse said, increasing risks for
shippers and governments worldwide.
"It's a problem that we've tried to explain to governments,"
he said. "It's in nobody's interests having uninsured ships with
dangerous cargo on board floating around, unable to receive
payments and everything else."
(Reporting by Jeslyn Lerh and Muyu Xu; Writing by Florence Tan;
Editing by Simon Cameron-Moore)
florence.tan.thomsonreuters.com@reuters.net))
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.