Russian insurance shores up oil exports to top buyer India, shows data

Russian insurers are playing a growing role facilitating the country's oil shipments to India, its biggest buyer, data obtained from trade and shipping sources shows, helping to protect Moscow's export revenue despite western sanctions.

Russian firms provided insurance cover for 60 per cent of Moscow's oil cargoes to India in July, up from 40 per cent in December last year, according to Reuters calculations based on the vessels' documents.

By using Russian insurers, Moscow can sell the oil above a $60 per barrel price cap that the Group of Seven (G7), the European Union and Australia imposed aiming to limit Russia's oil revenue following its invasion of Ukraine.

Over 60 per cent of Russia's seaborne oil exports go to India.

Western services such as shipping and insurance can only be used for Russian cargoes sold at or below the price cap.

Russian companies providing the insurance for exports to India in July included Ingosstrakh, Rosgosstrakh, Alfastrakhovanie and VSK Insurance. Prior to the Ukraine war, shippers mainly used large western insurers for protection and indemnity (P&I) cover.

Earlier this year, India extended approval to several Russian insurers for providing marine cover to tankers after state-run Russian National Reinsurance Company provided a financial guarantee.

In July, India overtook China to become the top buyer of Russian oil, even with China receiving pipeline and seaborne deliveries. For seaborne cargoes alone, India has been the largest market for Russian oil since an EU embargo on Moscow's oil took effect in 2022.

Russia's leading insurer Ingosstrakh was the largest insurance provider for tankers carrying Russian oil to India in July, the data showed.

Ingosstrakh said in an email response to Reuters that its "relations with India are long-term - the company has been present on this market since 1967", adding that it was not able to assess its share or a share of Russian insurance of oil tankers supplying to India.

Ingosstrakh also said that its entire shipping P&I portfolio accounts for less than 1 per cent of its total premiums.

Rosgosstrakh declined to comment. Alfastrakhovanie and VSK Insurance did not reply to Reuters' requests for comments.

Insurance cover for the remaining 40 per cent of tankers that shipped oil to India in July was provided by western companies.

Russian insurance companies are mostly used by oil shippers with strong links to Russia, such as Russian shipping company Sovcomflot.

Shipping firms based in countries such as Greece, the United Arab Emirates and China more often use western insurance when transporting Russian oil, the data shows.

While many western insurers withdrew from covering Russian oil shipments for fear of breaching the G7 price cap, some still provide cover.