The main reinsurer of Russian ships has been targeted by the European Union because of its role in limiting the impact of sanctions.
State-controlled Russian National Reinsurance Co (RNRC) was listed last weekend in the EU’s latest sanctions because of its role as the main reinsurer of Russian ships, including Sovcomflot tankers, exporting its oil.
“This reinsurance service offered by the RNRC has enabled the Russian government to deflect and mitigate the impact of Western sanctions on its oil trade — which provides a substantial source of revenue to the government of the Russian Federation,” the EU said in its listing.
Moscow-based RNRC is a subsidiary of the Central Bank of Russia.
The bank has increased authorised capital to the reinsurer from RUB 71bn ($940m) to RUB 300bn since the invasion of Ukraine, the EU said in its 645-page document detailing the latest round of measures.
“Various other sources, including those citing Russian government officials, confirm that RNRC has reinsured oil cargoes flying the Russian flag, which have been denied insurance by Western businesses,” it said.
Western insurers and reinsurers have retreated from covering Russian oil cargoes since the start of the war.
Shipping interests have to supply attestation documents to insurers and financiers to show they are operating at or below the price cap for exports to third countries.
US Treasury deputy secretary Wally Adeyemo said last week that Moscow has had to redirect billions of dollars to pay for “shipping, insurance and other services”, including to RNRC to support its trades.
Despite the measures, Russia’s oil exports have remained steady, although revenues are falling on a year-on-year basis owing to the price cap and other measures.
Moscow has said it will scale back oil production by 500,000 barrels per day in March, or about 5% of production, which suggest the sanctions may have had an impact.