European Union sanctions imposed in response to full blown Russians to Ukraine have effectively halted seaborne exports of Russian coal. Earlier, Brussels, as part of the fifth package of restrictive measures, banned Russian coal supplies to anywhere in the world.
It is reported by Bloomberg, citing sources familiar with the situation.
The agency found out that the largest Russian mining company Suek JSC has been unable to export coal since mid-August. The insurance and reinsurance markets are dominated by EU, UK and Swiss companies, making it difficult for shipowners to find transport coverage, the sources said.
The EU ban on imports of Russian coal and other goods into the bloc came into effect on August 10 after a four-month transition period. Russian coal companies began redirecting volumes to Asia long before the embargo went into effect, but shipowners are reinsuring their risks with large insurers who have not been able to cover such exports since August.
Companies are considering other supply options, but they will be more valuable and take time to reconfigure, pushing prices even higher.
Recall that Russia is one of the three largest world exporters of coal, controlling about 17% of world supplies. At the same time, the coal industry accounts for only about 1% of the Russian economy.
Source: Racurs
