Oil tankers stuck in the Black Sea. That could become a problem

CNN
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There is a crisis forming across an important trade route for oil, which if left unresolved could damage and boost global supply the prices in fragile moment for energy markets.

As of Thursday, 16 oil tankers traveling south from the Black Sea were waiting to cross the Bosphorus Strait into the Sea of ​​Marmara, an increase of five from Tuesday, according to a report by Istanbul-based shipping agency Tribeca. Another nine tankers are waiting for the southbound crossing from the Sea of ​​Marmara through the Dardanelles Strait to the Mediterranean.

Tracking in waterways controlled by Turkey, which Turkish officials said mostly affects shipments of crude oil destined for Europe. It caught the attention of UK and US government officials who are now in talks with Ankara to resolve the growing impasse.

Aqaba is associated with Western price ceiling On Russian oil, which came into force on Monday. The cap is supposed to limit the Kremlin’s revenue without adding pressure to the global economy by reducing supply. But Turkey insists that the ships prove that they have insurance that will be paid in light of the new sanctions, before allowing them to pass through the strait that connects the Black Sea and the Mediterranean Sea.

Although it is not currently causing disruption to global oil supplies and therefore prices, disruption could become an issue if left unresolved, said Jorge Leone, senior vice president of oil market analysis at Rystad Energy. “This is a very popular route around the world for global trade and specifically for crude oil,” he told CNN Business.

Countries including Russia, Kazakhstan and Azerbaijan use the Turkish Strait to transport their oil to global oil markets.

Traffic congestion in the Turkish Straits arose following its imposition this week Russian oil price ceiling. cover bars Shipowners carrying Russian oil are unable to obtain insurance and other services from European suppliers unless the oil is sold for $60 a barrel or less.

In light of the cover, Turkish maritime authorities are concerned on the risks of accidents or oil spills involving uninsured vessels, Ships are prohibited from passing through Turkish waters unless they can provide additional guarantees that their transit is covered.

in Notice Released last month by the Turkish government before fixing the price ceiling, Maritime Director General Unal Paylan said that given the “catastrophic consequences” for the country in the event of a crude oil tanker accident, “it is absolutely required that we somehow emphasize that [protection and indemnity] Insurance cover is still valid and comprehensive.”

The International Group of Protection and Indemnity Clubs, which provides protection and indemnity insurance for 90% of goods shipped by sea, said it could not comply. with turkish Policies.

The Turkish government’s requirements “go beyond the general information contained in a normal entry confirmation letter” and will require P&I clubs to confirm coverage even if they breach sanctions under EU, UK, US, and UK P&I law, the club said in a statement. statement.

Turkish officials say this position is “unacceptable” and on Thursday repeated their demands for letters from insurance companies. “Most of the crude oil tankers waiting to cross the strait are EU ships, and most of the oil is destined for EU ports,” the Turkish Maritime Authority said in a statement.

“It is difficult to understand why European Union-based insurers would refuse to provide this letter… to vessels belonging to the European Union carrying crude oil to [the] European Union When the European Union identified the sanctions in question.

It is clear that Western officials are worried about the potential Oil supplies disrupted, they say they are in talks with the Turkish government to resolve the situation.

US Deputy Treasury Secretary Wali Ademo told Turkish Deputy Foreign Minister Sedat Onal in a phone call that the price cap applies only to Russian oil and “does not necessitate additional inspections of ships” passing through Turkish waters.

“The two officials highlighted their shared interest in keeping global energy markets well supplied by creating a simple compliance regime that would allow oil to pass through the Turkish Straits,” the Treasury Department said in a statement.

According to a statement from the UK Treasury, “The UK, US and EU are working closely with the Turkish government, shipping and insurance industries to clarify the implementation of the oil price cap and find a solution.”

It added that “there is no reason why ships cannot access the Bosphorus for environmental or health and safety reasons.”

Despite the tanker backlog, the average wait time to cross the Bosphorus Strait is still much lower than it was at this time last year, according to Leon of Rystad Energy. “Given the reaction of officials in the UK and the US, my hunch is that this will be resolved very soon,” he said.

—— GulTyuzuz in Istanbul contributed to this article.