| Link(s): | Oil Price Cap Update – OFSI (blog.gov.uk) UK_Maritime_Services_Prohibition_and_Oil_Price_Cap_Guidance__November_2022_.pdf (publishing.service.gov.uk) |
Context
The UK and Price Cap Coalition (G7 + Australia) partners have agreed tough and comprehensive sanctions on Russia’s most lucrative export: crude oil and refined oil products. As well as collectively banning the import of Russian oil and oil products into their markets, they are also banning UK services from enabling the seaborne transport of Russian oil products globally.
Key points to note
- A price cap exemption to the services ban will permit the coalition’s services to continue to facilitate transport of Russian oil and oil products.
- The aim of the price cap is to reduce Russia’s revenues from oil and therefore their ability to fund its war in Ukraine through inflated global oil prices.
- Services impacted include finance, insurance and shipping.
- The maritime services ban and its price cap exception for crude oil will come into effect from 5th December 2022.
- The equivalent restrictions and exception for refined oil products will come into force from 5th February 2023.
- A General Licence, which will create the price cap, will be published before 5th December 2022. Additional general licences to ensure international alignment and the smooth operation of the price cap will also be published before 5th December 2022.
- Comprehensive guidance from HM Treasury is provided here.
Next actions
If this ban on Russian oil and oil products impacts the insurance services provided by your firm, ensure you have considered the impacts and made any relevant changes to policies and procedures before the ban takes effect.