India has expanded the number of Russian liability insurers allowed to cover ships docking at its ports, easing a key restriction on the supply of Russian oil the South Asian nation currently relies on in light of the war in Iran.

According to Reuters, India expanded the pool of approved Russian marine protection and indemnity (P&I) insurance providers from eight to 11, in order to expand availability of the liability coverage ships need to legally enter its ports. The move comes as Western insurers have pulled back from covering Russian cargoes due to sanctions related to Russia's war on Ukraine, making Russian insurers the only ones who will cover Russian tankers.

India is the world's third largest oil importer and consumer, and has relied on Russia to meet most of its demand during the Iran conflict, only because of a temporary waiver on sanctions issued by the U.S. in March, then extended for a month on April 11. The waiver allows India and other nations, such as China, to buy Russian oil as a way to relieve pressure on supplies created by ongoing limits on shipping traffic through the Strait of Hormuz.

But Russian entities are not a part of the International Group of P&I Clubs, which withdrew protection for Russian vessels when the U.S. slapped sanctions on Russia in 2022. But P&I insurance, which is separate from insurance that covers hull and machinery, is legally mandated for ships visiting most of the world's ports. It provides liability cover for cargo, oil spills, collisions, wreck removal, crew injury and environmental clean-up, among other risks. The International Group of P&I clubs is an unusual entity, formed in the mid-19th century, as a cooperative of mutual, non-profit associations that pool their large loss exposures, and also share their respective knowledge and expertise on matters relating to shipowners' liabilities and the insurance and reinsurance of such liabilities.

According to Insurance Business, Russia's shadow fleet of between 600 and 900 vessels, depending on classification, relies heavily on alternative insurers located in jurisdictions with weak regulatory oversight. Many are minimally capitalized, legally ambiguous or operate without recognized reinsurance. The Russian national reinsurer that backstops many of these policies, the Russian National Reinsurance Company, is itself under sanctions from the U.S., the U.K. and the EU.