Deepening Turkish Tanker Standoff Thwarts Russia’s Oil Sanctions

Istanbul: Turkey arose as a critical stumbling block to a complex international plan to deprive Russia of wartime oil incomes as the number of tankers holding on to leave the Black Sea through Turkish waterways kept on ascending on Friday.

Ankara has declined to scrap another insurance assessment rule it executed toward the start of the month regardless of long stretches of strain from Western authorities baffled by the policy.

A total of 28 oil tankers are in a line trying to leave the Bosporus and Dardanelles waterways, the Tribeca shipping agency said on Friday. G7 wealthy nations, the European Union, and Australia consented to bar suppliers of shipping services, such as insurers, from helping export Russian oil unless it is sold at an enforced low price, or cap, aimed at depriving Moscow of wartime revenue.

Turkey’s maritime authority said it would continue to keep out of its waters oil tankers that lacked appropriate insurance letters. Western insurers said they can’t give the documents required by Turkey as it might expose them to sanctions if it emerged that the oil cargoes they cover were sold at prices that exceed the cap.

The Turkish authority expressed that in case of a mishap including a vessel in breach of sanctions it was possible the damage wouldn’t be covered by an international oil-spill fund.

“(It) is out of the question for us to take the risk that the insurance company will not meet its indemnification responsibility,” it said, adding that Turkey was continuing talks with other countries and insurance companies.

It added the vast majority of vessels waiting near the straits were EU vessels, with a large part of the oil destined for EU ports – a factor frustrating Ankara’s Western allies.

The ship backlog is creating growing unease in the oil and tanker markets. Millions of barrels of oil per day move south from Russian ports through Turkey’s Bosphorus and Dardanelles straits into the Mediterranean. Most of the tankers waiting at the Bosphorus are carrying Kazakh oil and Treasury Secretary Janet Yellen said on Thursday the U.S. administration saw no reason that such shipments should be subjected to Turkey’s new procedures.

Washington had no reason to believe Russia was involved in Turkey’s decision to block ship transits, she added. The European Commission said on Friday the delays were unrelated to the price cap and Turkey could continue to verify insurance policies in “the same way as before”.

“We are therefore in contact with the Turkish authorities to seek clarifications and are working to unblock the situation,” a spokesperson told the media.

Turkey has balanced its good relations with both Russia and Ukraine since Moscow invaded its neighbor in February. It played a key role in a United Nations-backed deal reached in July to free up grain exports from Ukrainian Black Sea ports. Relations between NATO allies Ankara and Washington have at times been rocky, however, as Turkey last month renewed calls for the United States to stop backing Syrian Kurdish forces.

The Biden administration levied sanctions on Thursday on a prominent Turkish businessman Sitki Ayan and his network of firms, accusing him of acting as a facilitator for oil sales and money laundering on behalf of Iran’s Revolutionary Guard Corps.