London announced on Thursday that it will ban British vessels and service providers, including insurance companies, from participating in the transport of Russian oil that is sold above a price ceiling set by the G7 and Australia, AFP reported.

The decision comes after G7 finance ministers pledged in September to cap Russian oil prices and align Britain, the world’s leading marine oil insurer, with the European Union (EU).

The measure will enter into force on December 5, the British government said in a statement.

The price cap is “a way to undermine (Russian President Vladimir) Putin’s ability to finance his war in Ukraine (…) while ensuring that third countries can continue to receive oil at affordable prices,” the Ministry of Finance said in a statement.

However, neither Britain, its G7 partners nor Australia will benefit from the restriction, London said, as they “have already banned imports of Russian oil”.

The UK accounts for 60% of the P&I insurance market

The services covered by the ban include “insurance, broking and delivery” and the level of restriction will be “set by the coalition in due course”, the UK government added.

Commercial vessels must be covered by various types of insurance: against damage to the vessel, for cargo, as well as unlimited cover for damage caused to third parties, protection and indemnity (P&I) insurance.

This particular type of marine insurance, which covers risks from war to environmental damage, is mainly offered by professional associations known as “P&I clubs”, which pool the risks because they involve huge sums.

London’s position on this has been scrutinized by the industry as the UK accounts for 60% of the P&I insurance market.

London also indicated that further restrictions, this time on the sale of Russian oil products, would come into force on February 5 “to align with the EU’s timetable for similar measures”.