EUROPEAN UNION and Group of Seven governments are understood to be negotiating a last-minute compromise deal with Türkiye over its refusal to allow vessels to sail through the Bosporus without insurance guarantees that International Group P&I Clubs argue are unlawful.

Türkiye has issued a requirement that from December 2 all ships transiting or entering Turkish waters have to provide letters of confirmation from the shipowner’s P&I Club attesting that cover will remain in place under any circumstances throughout the duration of the transit.

The International Group of P&I Clubs has said that its clubs should not issue such a letter to their owner or charterer members on the grounds that it would breach the sanction regulations now in place.

Türkiye’s requirements mean that a P&I Club has to confirm that cover will not be prejudiced under any circumstances, including where there is a sanctions breach, whether knowingly and intentionally or unknowingly and unintentionally. 

Issuing a confirmatory letter under these circumstances would expose the club to a breach of sanctions under EU, UK and US law, according to the International Group.

Senior P&I officials are discussing the issue directly with the Turkish authorities.

However, Lloyd’s List understands that the issue has already been escalated to EU and G7 governments, such are the political sensitivities of the problem in light of the price cap on Russian oil exports coming into force.

The $60 per barrel of crude oil price cap — which comes on top of the EU import ban on Russian seaborne crude oil and oil products, and the corresponding bans of other G7 partners — is aimed at reducing the revenues Russia earns from oil.

Russia said on Monday that a Western price cap on its oil would destabilise global energy markets but would not affect its ability to sustain what it calls its “special military operation” in Ukraine.

The imminent introduction of this new Russian oil waiver programme is at heart of the request for letters of confirmation from P&I Clubs stating that cover will not be subject to sanction clauses even if it transpired that damage had been caused by a sanctioned cargo.

Turkish authorities are concerned that in the event of an accident involving Russian crude, no cover would be available.

EU and G7 states have sought to reassure Turkey that licensing arrangements to deal with emergency environmental issues will address their concerns.

However, as of Monday the Turkish authorities are refusing to allow vessels without letters to transit Turkish waters.

“Clearly, members will be keen to continue voyages through Turkish controlled international straits and waters. However, the problem currently faced by members arises directly from the prohibitions that the EU, the UK and the US have introduced on Russian oil,” explained an advisory notice posted on Gard P&I’s website on Monday. 

“States are waking up to the issue that they may go uncompensated in the event of a large claim,” explained one senior P&I official.

“EU and G7 states have tried to address that via licences, so the issue is whether Turkey feels sufficiently reassured by that… It really depends on what appetite coastal states have to allow vessels to sail past them that don't have third party liability cover, or may have third party liability cover, but from a Russian company or providers that they have less confident in.” 

While the liability concerns theoretically could affect any coastal state, Türkiye is a particularly sensitive area given the volumes of Russian crude that will pass through its waters under the terms of the new rules, and the high risk of maritime casualties generally.

The areas to the north and south of the Bosporus Strait have been increasingly busy this year compared with the past year, leading to a higher volume of ships waiting in anchorage.

Some 207 collisions were reported in 2022, with seven taking place in the waiting zones outside of the Bosporus Strait, according to Lloyd’s List Intelligence data.

There is a grace period on oil cargoes from Russia loaded before 5 December, which expires on 19 January.

https://lloydslist.maritimeintelligence.informa.com/LL1143248/EU-and-G7-states-seek-to-resolve-PI-standoff-with-Trkiye