Turkey reaches deal over new crude tanker insurance regulations

Turkey welcomed an agreement reached with its counterparts on Tuesday that allows the continuation of a new regulation requiring crude oil tankers to present an insurance confirmation letter before transiting Turkish straits.

The Turkish measures, which came into effect on 1 December, requires vessels to provide proof of insurance for the duration of transit through the Bosphorus or when calling at Turkish ports.

The regulation has caused shipping delays, with up to 20 tankers waiting at the same time in the Black Sea last week, as they worked to present the necessary documents.

Turkey's Maritime Authority said that 22 of the 26 crude oil tankers that arrived at the Bosphorus had presented the necessary letter, and 19 of them had already transited the strait.

Four ships are still waiting in the Black Sea and authorities are still awaiting an insurance confirmation letter before allowing them to pass through the Bosphorus, which bisects Istanbul, it added.

"It is pleasing that the talks we have been holding with our counterparts have concluded with the acceptance of our new regulations that will protect the Turkish straits and that maritime trade continues as ordinary," the maritime authority said.

Western insurers have said the regulations would mean they would have to provide cover even in the event of ship being in breach of sanctions against countries including Russia, which is something they were not prepared to do.

The revised letter template seen by Reuters showed the wording had changed which indicated that insurers would not bear liability in all circumstances.

Norwegian ship insurer Gard confirmed an agreement had been reached allowing ships carrying crude oil cargoes to continue their voyages through Turkish-controlled waters after "significant engagement" between Turkey and the International Group ship insurance association.

A Gard spokesperson added that they were happy that an agreement had finally been reached.

There was no immediate comment from the International Group.

Industry sources said the new template had already been used by some of the Western insurers to enable some of the tankers that were stuck to sail.

The average waiting time at the Bosphorus for southbound tankers fell to 2.9 days to 3.4 days from 3.8 days to 4.3 days on Monday, the Tribeca shipping agency said. Average waiting time peaked at above 6 days last week.

The Turkish regulations came into effect before a $60 per barrel price cap was imposed on Russian seaborne crude on Dec. 5.

G7 wealthy countries, the European Union and Australia agreed to bar providers 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.

Millions of barrels of oil per day move south from Russian ports through Turkey's Bosphorus and Dardanelles straits into the Mediterranean.