Mumbai-based Gatik Ship Management, an oil tanker company actively involved in the transportation of Russian oil, has lost its standard industry insurance coverage from the American Club due to a breach of a Group of Seven (G7) price cap regulation. This cap dictates that the services related to Russian oil can only be provided if the oil costs $60 per barrel or less. Gatik reportedly intended to transport barrels exceeding this price limit, leading to the termination of its protection and indemnity (P&I) cover.
The P&I cover is crucial for shipping companies as it insures against risks such as collisions and spills. Being part of the insurance offerings by the International Group of P&I Clubs, it serves as a trading passport. The American Club, one of the 12 entities within this International Group, confirmed the discontinuation of Gatik’s cover but refrained from commenting on the reasons.
According to the Equasis international maritime database, Gatik emerged as one of the few new tanker companies in response to escalating western sanctions on Moscow. The company is elusive with no visible contact information.
As per Bloomberg data, all 48 tankers managed by Gatik have loaded Russian oil or refined products at least once in the current year, and the American Club is listed as the insurer for 34 of them. Gatik’s fleet can reportedly carry about 31 million barrels of oil and fuels.
Despite this development, India, where Gatik is based, hasn’t adopted the G7 price cap nor imposed sanctions on Russian oil. Gatik started expanding its fleet last summer, as per data from VesselsValue, a firm specializing in the sale and purchase of merchant ships. This incident shows the enforcement of G7 measures and the potential risks associated with the transportation of Russian oil, especially considering recent US government warnings about deceptive tactics used by some oil tankers.