Russian insurance boosts oil exports to India's top buyer

Data from sources in the shipping and trade industries shows that Russian insurers play a greater role in facilitating oil shipments by Russia to India, which is its largest buyer. This helps to protect Moscow's revenue through exports despite Western sanctions.

According to calculations based upon the documents of the vessels, Russian firms insured 60% of Moscow’s oil cargoes bound for India in July. This is up from 40% last December.

By using Russian insurance companies, Moscow can sell oil above the $60 per barrel cap that was imposed by the Group of Seven (7 G7), the European Union, and Australia to limit Russia's revenue from oil following its invasion of Ukraine.

India receives 60% of the Russian oil exported by sea.

Only Russian cargoes that are sold below or at the price cap can be covered by Western services like shipping and insurance.

Ingosstrakh and Alfastrakhovanie were among the Russian companies that provided insurance in July for exports to India. Before the Ukraine War, most shippers used large western insurance companies for P&I cover.

India granted approval earlier this year to several Russian insurance companies for marine coverage of tankers, after the state-owned Russian National Reinsurance Company offered a financial guarantee.

India became the largest buyer of Russian oil in July, despite China's pipeline and seaborne deliveries. Since the EU embargo against Moscow's oil began in 2022, India is the biggest market for seaborne cargoes.

The data shows that Ingosstrakh, Russia's largest insurer, was the biggest insurance provider in July for tankers transporting Russian oil to India.

Ingosstrakh stated in an email that "relations with India have been long-term, the company has existed on this market since 1967". It added that it could not assess its share or that of Russian insurance for oil tankers that supply India.

Ingosstrakh said its entire portfolio of shipping P&I accounts for less that 1% its total premiums.

Rosgosstrakh refused to comment. Alfastrakhovanie Insurance and VSK Insurance have not responded to requests for comment.

Western companies provided insurance cover for the other 40% of tankers which shipped oil to India during July.

Oil shippers with strong ties to Russia such as Sovcomflot, Russian shipping company, use Russian insurance companies.

The data indicates that shipping firms in Greece, the United Arab Emirates, and China are more likely to use insurance from the West when transporting Russian crude oil.

Some western insurers still cover Russian oil shipments, despite the fact that many have stopped doing so for fear of exceeding the G7 price limit.

(source: Reuters)