The Lloyd’s Joint War Committee (JWC) has added all Russia’s territorial waters to the listed areas of war, piracy, and terrorism hazards, the marine insurance advisory board says in a statement.
The move obliges all shipowners to notify their insurers of a proposed voyage to the listed area, and gives significant grounds to insurers to deny the cover or negotiate the premiums appropriate to risks costs.
Steel suppliers from Russia are already facing severe complications with shipping non-sanctioned products to export markets, as some destinations do not accept Russian vessels, flags, or/and captaincy. The EU confirmed on Monday it will ban Russian vessels from its ports, with very strict exceptions. This means suppliers, already squeezed by existing restrictions, will face even tighter shipping conditions and higher premiums, Kallanish notes.
Most recently, before the addition of all Russia’s territorial waters to the listed area by Lloyd’s JWC, shipping of a medium-sized pig iron cargo to Italy from the Black Sea was quoted at $140/tonne. This is compared to around $40/t before Russia’s invasion of Ukraine on February 24.
The majority of Western shipowners have already left the Russian freight scene, with Lloyd’s move expected to expand that number further. Russia has a relatively small fleet compared to the size of its international maritime trade. Its largest shipbuilding company – United Shipbuilding Corporation – was sanctioned by the West in February.
Katya Ourakova UK
