The UK is pressing ahead with legislation to deter its services from being utilized to permit oil shipments from Russia internationally.
A statement released from the Treasury on Thursday mentioned that the new law, to be effective from 5 December, will place a ban on the UK’s ships and services, including insurance, shipping, and brokerage, to facilitate the maritime transport of Russia’s crude oil.
It follows a similar prohibition for US firms approved this week in a move to restrict Moscow’s revenues following the invasion of Russia in Ukraine.
Insurance is one of the crucial measures that facilitate the movement of oil by sea, where the UK stands out as a global leader, with 60% of cover worldwide.
The HM Treasury mentioned that 5 December had been chosen to align with a parallel measure introduced in the EU.
The new law is expected to prevent nations from availing of the UK’s services to transport oil from Russia unless it’s bought at or below a price cap set by Australia and G7 – to be finalized in due course.
The HM Treasury said that the cap tactics help ensure that nations can continue securing cheap oil. It added that the UK and the nation’s coalition partners would not use the cap, as they’ve placed an import ban on Russia’s oil.
Chancellor Jeremy Hunt also mentioned that they continue to support Ukraine in the face of Putin’s illegal and brutal invasion.
Russia accounts for a limited fraction of the UK’s oil and gas usage – approximately 8% of oil and about 4% of gas.
Despite this, Britain isn’t insulated against the price fluctuations of such commodities on the worldwide market, brought about by Russia’s invasion of Ukraine.
References: Financial Times, UpstreamOnline, Bloomberg