IT HAS probably been a long time since a major national newspaper last wrote a detailed front page exclusive based on textual analysis of the small print of marine insurance contracts.

But the Financial Times this morning eschewed barmy conspiracy theories about the Princess of Wales and the ongoing furore over a £10m donation to the Conservative Party in favour of examining the dark fleet’s P&I arrangements.

Many policies covering tankers carrying Russian crude are so worded as to make it impossible to claim against them in the event of a spill of sanctioned cargo, Britain’s leading business daily informed readers.

Lloyd’s List is quoted in the article. We have been raising concerns about the insurance of the dark fleet* circumventing the Western-imposed $60 a barrel price cap for some time. The latest revelations fill out some of the blanks.

Until now, it was uncertain who had been writing this business, mainly comprised of elderly (and thus higher risk) tonnage. Western underwriters were precluded from doing so in late 2022, after the US, EU and UK tabled a ban in response to the Russian invasion of Ukraine.

The working assumption in the sector has long been that Russia’s largest domestic insurance outfit Ingosstrakh was filling much of the gap, backed by non-western reinsurers, most likely including the central bank-owned Russian National Reinsurance Company.

Such a conclusion was always intuitively plausible. But absent of any hard evidence, it was a supposition based on a process of elimination. It just seemed the most likely option.

Now, thanks to documents leaked to the FT and Danish investigative journalism outlet Danwatch, we have confirmation of at least the first part of the proposition. What should we make of it?

Ingosstrakh, partly owned by Italy’s Generali, is a high quality for-profit commercial insurer and undoubtedly has the first layer financial clout and reinsurance muscle to pay out on a major claim. Moreover, it is a Russian concern and thus not bound to observe restrictions devised in Washington, Brussels or London.

But it is obviously mindful that the sanctions are enforced through the big stick policy of freezing the dollar assets of those who do not play ball, and it will also be factoring in reputational risk.

As a workaround, Ingosstrakh policies require oil exports to be “in compliance with the applicable US, UK and (or) EU laws”, and cites an EU regulation that includes the price cap. Ingosstrakh has also confirmed that it reserves the right to cancel cover for tankers selling oil above the price cap.

But it would be naive to believe that the cap is being observed by dark fleet operators, whose very raison d’etre is not to observe it. Available data suggests that something like 90% of Russian oil exports are changing hands above the ostensible cut-off point, calling the entire object of the exercise into question.

The upshot is that were a major spill of sanctioned crude to result, the clean-up bill — which could potentially run to billions of dollars — would end up being met by the IOPC Funds, as part of its remit of providing a funder of last resort in such circumstances.

Were such a casualty to occur in the English Channel, it would make the current controversy over water companies’ propensity to dump raw sewage in our rivers and seas look like a wine-sodden dinner party argy-bargy.

Were it to coat French or Spanish tourist beaches or fishing grounds with toxic sludge, reviving memories of 2022’s Prestige disaster, the regulatory consequences for all tanker operators could prove severe. Indeed, a leading Danish politician is already talking in terms of further EU measures.

The ongoing scandal of false flagging will ramp up those kinds of pressures, with over 100 vessels known to be registered fraudulently, according to the International Maritime Organization’s database. The real number is likely to be much higher.

Many of the flags up to their neck in this one are also being used for dark fleet operations. The lack of oversight enables both the dark fleet and substandard shipping practices to flourish, undermining decades of environmental and safety improvements in shipping.

It’s 2024 and we still have vessels that are “owned” by anonymous brass plate companies, “flagged” with fictitious “registries¨, “IMO numbered” with digits that may as well be based on mum’s birthday, “classed” by little-known recognised organisations, “insured” by fixed premium providers more likely to fold than pay a substantial claim and frequently engaged in spoofing and Automatic Identification System manipulation.

This isn’t progress. Anything but. Even the Financial Times is starting to notice.

* Lloyd’s List defines a tanker as part of the dark fleet if it is aged 15 years or over, anonymously owned and/or has a corporate structure designed to obfuscate beneficial ownership discovery, solely deployed in sanctioned oil trades, and engaged in one or more of the deceptive shipping practices outlined in US State Department guidance issued in May 2020. The figures exclude tankers tracked to government-controlled shipping entities such as Russia’s Sovcomflot, or Iran’s National Iranian Tanker Co, and those already sanctioned.

Download our explainer on the different risk profiles of the dark fleet here