Thread by @thijsvandegraaf

I see many early analyses of the EU's #oil #embargo against Russia but one crucial point that is not mentioned very often is that the package is almost certainly going to include a #shipping #insurance ban.

This might make or break the EU's oil embargo. 🧵

https://twitter.com/eucopresident/status/1531424785464320000

The details still need to be fleshed out, but if it is included, the #insuranceban is a potentially powerful tool.

95% of shipping insurance for Russian oil was carried out in Europe, primarily in London.

bloomberg.com/news/articles/…

The insurance ban would not just affect Russian oil exports to Europe. It would affect Russian oil exports everywhere else.

There is a precedent: restrictions on oil tanker insurance was one of the key means by which the US and Europe successfully limited #Iran's oil exports from 2012 to 2015.

onlinelibrary.wiley.com/doi/full/10.11…

In the meantime, insurers from Europe and the US are curtailing coverage for Russian oil tankers, to avoid breaching sanctions imposed.

This clear case of #selfsanctioning is expected to hit Russia's oil exports in June and July this year.

reuters.com/markets/commod…

Russia has successfully rerouted supplies of crude from Europe and the US to Asia. That's what happens if you try to impose a unilateral embargo on a single producer in a global commodity market.

ft.com/content/4f277a…

In theory, an insurance ban can close much of the loopholes.

In practice, there are still questions. Will the UK and US join the EU in adopting the shipping insurance ban? Can insurers from China, Russia, etc. step in, potentially with government guarantees?