India has quietly expanded the list of Russian insurance companies permitted to provide marine liability cover for vessels calling at its ports, adding three new entrants to bring the total to eleven, as it races to secure energy supplies following the closure of the Strait of Hormuz to commercial oil traffic.
The move, disclosed last week by India's Directorate General of Shipping, adds Gazprom Insurance, Rosgosstrakh Insurance and Balance Insurance to a roster that already includes some of Russia's largest state-linked insurers. The South Asian nation is now the world's top buyer of Russian crude, and it is leaning more heavily on flows from Moscow as the war between the United States, Israel and Iran chokes cargoes through Hormuz, a waterway that remains at near-total halt, with the conflict now in its eighth week.
The decision is, at one level, a straightforward logistics adjustment. Members of the Europe-based International Group of P&I Clubs, which provides marine liability cover for approximately 87 percent of the world's ocean-going tonnage, do not cover Russian vessels due to sanctions. If Russian oil is to reach Indian refineries, the tankers carrying it need some form of recognised protection and indemnity cover to berth. By formally approving an expanded list of Russian substitutes, New Delhi is trying to reduce delays at port and lend a veneer of regulatory order to an arrangement that is anything but orderly in the wider maritime insurance market.
But the expansion has drawn fresh attention to a question that has shadowed Russia's oil trade since Western insurers withdrew en masse following the 2022 invasion of Ukraine: whether the Russian firms filling the void are capable of meeting the liabilities they are underwriting.
Before Russia's invasion of Ukraine, the International Group of P&I Clubs was the uncontested backbone of maritime liability insurance. Its thirteen member clubs, headquartered predominantly in London and Scandinavia, collectively insured the vast majority of the world's tanker fleet against catastrophic risks: oil spills, collisions, wreck removal, crew injury, environmental clean-up. The system worked because its members pooled claims and backed their obligations with reinsurance purchased in the deepest commercial markets in the world.
That architecture began to fracture when G7 sanctions made it unlawful for Western firms to provide services — including insurance — to vessels carrying Russian oil above a price cap. The International Group clubs, most of them domiciled in sanctioned jurisdictions, withdrew. Since then, a handful of Russian insurers have stepped into the gap, providing hull and liability cover or at least the documentation that allows ports and brokers to process voyages. These domestic carriers, often reinsuring through a state-controlled vehicle, operate outside the international P&I framework that traditionally guarantees claims payments, pollution clean-up and long-tail liabilities.
Russia's shadow fleet, estimated at between 600 and 900 vessels depending on classification, relies heavily on alternative insurers located in jurisdictions with weak regulatory oversight. Many are minimally capitalised, legally ambiguous, or operate without recognised reinsurance. The Russian national reinsurer that backstops many of these policies, the Russian National Reinsurance Company, is itself under sanctions from the United States, the United Kingdom and the European Union.
The question of whether a large reinsurance payout to what the Kremlin views as an "unfriendly" state could become a political issue looms over the entire arrangement — Russia having already demonstrated a willingness to blame Western sanctions for its inability to meet obligations in other sectors.
The context for New Delhi's decision is stark. India's crude oil imports fell 13 percent in March from pre-war levels in February, with the share of West Asian oil falling to its lowest level ever at 26.3 percent, as shipments from Iraq and the United Arab Emirates fell to multi-year lows. Imports from Russia nearly doubled from February to 2.25 million barrels per day in March, as Indian refiners snapped up Russian oil floating at sea after New Delhi became the first country to receive a waiver from the United States to buy the sanctioned supply.
That waiver has itself been a source of anxiety. A US waiver allowing countries to buy Russian crude expired on April 11, removing a key source of energy supply as global markets remain tight. India imports more than 85 percent of its crude oil requirements — around 5.5 million barrels per day — making it the world's third-largest oil importer. The US Treasury subsequently extended a further short-term waiver to mid-May, but the month-to-month uncertainty has underscored how precarious India's energy position has become.
On April 17, the US Treasury allowed operations involving the sale, transportation and unloading of Russian-origin oil loaded onto tankers before that date to continue until May 16. The extension was described as temporary.
For insurers and risk professionals watching the situation, the deeper concern is not the politics of the trade but the structural inadequacy of what replaces the International Group's cover when something goes wrong.
Policies in this market can be opaque, jurisdictionally constrained and vulnerable to political or legal disruption in the event of a major accident. A large oil spill from a tanker insured by a Russian domestic carrier — whether in the Indian Ocean, the Red Sea or at an Indian port — would likely trigger claims far exceeding the capitalisation of the insurer involved. The question of who would ultimately bear the liability is unanswered.
Port authorities have begun tightening document checks, requiring verifiable, international-standard P&I evidence for port entry and scrutinising registry transfers and ownership changes more closely. A Western-sanctioned vessel carrying Russian oil to Indian Oil Corp recently faced delays discharging its cargo at a port in eastern India due to a hold-up in the online verification of insurance provided by a Russian insurer.
Ukraine has also brought a harder-edged dimension to the risk calculus. War risk insurance is now as high as one percent of hull value for a port call in Russian Black Sea ports, with cover for a newer Suezmax potentially costing $800,000 per voyage. Ukrainian intelligence has separately alleged that a number of Russian shadow fleet tankers are transporting oil with insurance certificates from entities that do not exist as described in the documents — a finding that, if substantiated, would represent fraud on a significant scale.
India's formal approval of Russian insurers is, in its own terms, an attempt to manage the risks of an arrangement it has not chosen freely. By requiring the Directorate General of Shipping to vet and register foreign insurers — including Russian ones — New Delhi is at least creating a documented framework rather than leaving the question of adequate cover entirely to port officers and shipping agents.
Indian policymakers are caught between the expectations of Washington and the energy supply squeeze that Washington's own military operations in the region have significantly worsened. The decision to expand the Russian insurer list was taken days before the US extended its Russian oil waiver — suggesting New Delhi was not prepared to wait for American approval before securing the logistical infrastructure to keep its refineries running.
What the expansion does not resolve is the underlying structural risk. The maritime insurance system has worked because it has relied on all parties following the same rules. There are now major actors who are not following those rules, and the system has not adjusted to cope. India's ports may now have eleven Russian insurers on an approved list. Whether any of them could absorb a catastrophic claim is a question the list itself does not answer.
