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February 04
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A restriction on Russian oil prices in the European Union came into force on Monday, and it is already disrupting shipments - oil tankers are piling up off Turkey's coast as Ankara demands documents confirming that ships are fully insured, the Financial Times reported.

This has coincided with the entry into force in the EU of the $60-per-barrel price cap on Russian oil.

Since 90% of the world's shipping insurance is provided by a group largely based in Europe, the goal is to curb Russia's oil revenues by limiting the insurance coverage that insurers can provide, because only those ships that carry cargo below the EU price limit can access Western maritime insurance.

But the Turkish government requires full insurance coverage for ships, leading to gridlock and traffic jams for 19 crude oil tankers waiting to cross Turkish waters, the FT reported, citing ship brokers, oil traders and satellite tracking services.

Such requirements go beyond the general information normally contained in a registration letter for ships, so P&I Clubs, an international group of protection and indemnity providers representing a group of shipping insurers, has concluded that it "should not issue such a permit" to ships.

This opposition, in turn, has affected traffic around Turkey's Bosporus and Dardanelles straits, as they link exports from Russian Black Sea ports to world markets. According to the FT, the first ship to arrive has been awaiting permission since Nov. 29.

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