Yellen says EU, UK insurance ban would ‘lock in’ Russian oil

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About 95% of the world’s tanker liability coverage is arranged through a London-based insurance organization called the International Group of P&I Clubs that has to heed European law. (Credit: Sarah Silbiger/Bloomberg)

(Bloomberg) — U.S. Treasury Secretary Janet Yellen said a plan to ban European and U.K. firms from insuring tanker shipments of Russian oil could help limit Moscow’s energy revenues as allied countries seek to curb revenues flowing to Moscow as the war in Ukraine continues.

The U.S. has already outlawed imports of Russian oil and the European Union has agreed to prohibit seaborne imports of Russian crude in six months. On top of that, the bloc has worked toward coordinating with some Group of Seven members on a ban on the insurance services needed to ship Russian oil anywhere in the world.

“The U.K. is very likely to go along with such a ban and that could have the effect of locking in a good deal of Russian oil,” Yellen said Thursday at an event organized by the “New York Times.”

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About 95% of the world’s tanker liability coverage is arranged through a London-based insurance organization called the International Group of P&I Clubs that has to heed European law.

Yellen was asked about comments she made earlier in the week at a congressional hearing with regard to talks to set up a buyers’ bloc designed to limit Russia’s oil revenues.

Buyers’ bloc

“There would need to be a reasonably large group of countries that would go along with it, and it would be necessary to create such a coalition,” Yellen said Thursday.

The Treasury chief on Tuesday said at the Senate Finance Committee that talks on setting up a buyers’ bloc are “extremely active.”

“What we want to do is keep Russian oil flowing into the global market to hold down global prices and try to avoid a spike that causes a worldwide recession,” Yellen said Tuesday.

— With assistance from Ewa Krukowska.

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