An oil tanker company heavily involved in transporting Russian oil lost industry-standard insurance for its fleet after breaching a Group of Seven price cap related to transporting the country’s barrels.
Gatik Ship Management lost so-called protection and indemnity coverage provided by the American Club, said a person familiar with the matter, who declined to be identified to discuss sensitive information. The cover protects against hazards such as collisions and spills.
The coverage was canceled because the American Club was informed that Gatik intended to transport barrels bought at prices above the threshold, the person said. The American Club confirmed the interruption of coverage. He declined to comment on why.
Since the beginning of December, companies from G-7 countries can only provide services for Russian oil if the cargo costs $60 a barrel or less.
While the threshold initially appeared to prioritize the continuation of Russian oil flows, the cessation of Gatik coverage shows that the measures have some teeth. The US government warned on Monday that some oil companies sending Russian crude to Asia are using deceptive tactics to circumvent the Washington-led country’s export price cap.
The American Club is one of 12 organizations in the International Group of P&I Clubs, which collectively provide industry-standard coverage that serves as a passport to free trade.
Mumbai Office
Gatik, which has an address in Mumbai according to the international maritime database Equasis, is one of a handful of tanker companies that came out of nowhere when the West began increasing sanctions on Moscow last year.
When Bloomberg visited the address earlier this year, a person from a neighboring office said Gatik had moved out and there was mail strewn on the floor outside. There is no website, phone number, or other means of contacting the company.
The insurance that Gatik lost is important for ships when entering ports or navigating key waterways such as Turkey’s Bosphorus and the Dardanelles navigation straits.
Each of the 48 tankers identified as being operated by Gatik in a database maintained by Equasis, or by data analytics firm Vortexa, has loaded Russian crude or refined products at least once this year. The American Club is listed as the insurer of 34 of them, with another nine covered by unknown entities. The Gatik fleet can carry about 31 million barrels of oil and fuel, data compiled by Bloomberg show.
Gatik is among the top 10 owners of Aframax tankers that carry about 700,000 barrels of crude on each voyage, according to Clarkson Research Services Ltd., a unit of the world’s largest ship broker.
India did not subscribe to the price cap, nor does it have other sanctions on Russian oil.
Gatik really started building its fleet last summer, according to VesselsValue, a company that monitors the buying and selling of merchant vessels.
