When the oil price cap was first introduced, the LMA produced model clauses to help the insurance market comply with the price cap requirements and obtain the relevant documentation. These clauses were drafted on the assumption that the oil price cap coalition was operating using the same price.

The coalition now diverges. The UK and EU will reduce the price cap to around US$47 per barrel in September 2025, while the US will maintain its cap at US$60 per barrel. This divergence means London market underwriters will need to reconsider how they handle business involving Russian oil where there is a US insurer or insured, particularly if the US party applies the higher price cap.

To support members, the LMA has issued updated guidance confirming the continued relevance of the LMA model clauses and advising on the practical steps underwriters should consider.

LMA Oil Price Cap Notification

Arabella Ramage
Legal and Regulatory Director
arabella.ramage@lmalloyds.com

Neil Roberts
Head of Marine and Aviation
neil.roberts@lmalloyds.com