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Exxon’s Russia Oil Output Collapsed After Rejection of Local Tanker Insurance: Sources

October 17, 2022

Oil output at the giant Exxon-led Sakhalin-1 Russian Pacific project collapsed following the U.S. major’s refusal to accept local insurance for tankers after Western insurers pulled out due to sanctions, several industry sources told Reuters.

Western insurers withdrew cover from tankers operated by state-run Sovcomflot, Russia’s biggest shipping group, which was sanctioned following Moscow’s invasion of Ukraine.

“Exxon has refused to take Sovcomflot’s tankers,” one industry source said. Some cargoes meant for supplies to Indian refiners were also hit as Exxon did not recognize the alternative cover Sovcomflot had arranged from Russian insurers, according to the sources.

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