Iran General NewsKey China insurer to stop covering tankers with Iran...

Key China insurer to stop covering tankers with Iran oil

-

Reuters: Key ship insurer the China P&I Club will halt indemnity coverage for tankers carrying Iranian oil from July amid tightening Western sanctions against OPEC’s second largest producer, two club officials told Reuters on Thursday.
By Randy Fabi

SINGAPORE – (Reuters) – Key ship insurer the China P&I Club will halt indemnity coverage for tankers carrying Iranian oil from July amid tightening Western sanctions against OPEC’s second largest producer, two club officials told Reuters on Thursday.

This is the first sign that refiners in China, Iran’s top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country. Iran’s other top customers — India, Japan and South Korea — are running into similar problems, raising questions on how Tehran will be able to continue to export the bulk of its oil.

Oil prices are up nearly 14 percent since the start of this year on concerns that Iranian supplies may be disrupted due to Western sanctions. Brent crude oil traded above $123 (77.35 pounds) a barrel on Thursday.

The China P&I Club, whose members include major Chinese shipping firms Sinotrans and COSCO Group, is the first Chinese maritime insurer to confirm it will halt business with tankers operating in Iran, following similar action in Japan.

“Many ship owners want to join our club and want our club to cover this risk, but considering all these regulations from the United States and the EU, I know the China P&I club will not do that,” said a Hong Kong-based official with the insurer, which provides coverage to more than 1,000 vessels.

“The China P&I club will not take the risk. We have asked our members not to go there, if they go there, they take their own risk,” the official added.

Starting in July, European insurers and reinsurers will be barred from indemnifying ships carrying Iranian crude and oil products anywhere in the world, in line with sanctions on Tehran.

Iran sells most of its 2.2 million barrels per day of oil exports in Asia, where China, India, Japan and South Korea are the four biggest buyers. They have either made a cut in imports or pledged to do so in the face of growing sanctions pressure by the West intended to compel the Islamic Republic to halt its disputed nuclear programme.

Asian ship owners will be further limited in their search for insurance to replace their European-based coverage as the China P&I Club was seen as one alternative. It was not clear if other Chinese ship insurers were also planning to reduce tanker coverage.

“I really don’t know what will happen,” said a Beijing-based Chinese industry official. “We are talking about $1 billion (per tanker). No single insurance company can handle that.”

China P&I Club is not a member of the Group of International P&I Clubs, an association of customer-owned ship insurers which cover 95 percent of the world’s tankers against pollution and personal injury claims. The Chinese insurer has applied to join the club and could become a member as early as February 2012, industry sources said.

Japan’s main shipping insurer last month said it would only be able to provide a fraction of cover for tankers.

European insurers provide cover for the majority of the world’s oil tanker fleet. Industry officials say ship owners who can still legally trade with Iran will be hard pressed to find sufficient alternative insurance, which is also likely to be less comprehensive.

An official with the China P&I club held out hope that the European Union would decide on a last-minute easing of the sanctions.

“As far as I’ve seen with these new published sanctions, it seems to us that there might be some room for compromise,” said a Beijing-based club official.

(Additional reporting by Aizhu Chen in Beijing; Editing by Ed Lane)

Latest news

Iran’s Youths Broke the Spell of Fear

One of the main characteristics of the recent protests in Iran is the courage and fearlessness of the people,...

Iran Is on the Brink of a Revolution

The wall of fear has been broken. In many cities across Iran, women are taking to the streets, leading...

Iran’s Regime Claims To Fill Global Energy Gap Despite Crippled Petroleum Sector

In recent weeks, the Iranian regime’s officials have been constantly exaggerating their huge capacity in oil and gas reserves...

What Is Happening in Iran?

Following the brutal killing of Masha Amini, the Iranian people have once again united to fight and defeat the...

Iran Regime’s Ministry of Culture’s Decision To Eliminate Children’s Intellectual Centers

With the so-called ‘Cultural Revolution’ which took place between 1980 and 1983, the Iranian regime tried to purge the...

Water Shortage Crisis and the Destruction of Iran’s Water Resources

Iran is currently suffering from a number of dangerous natural disasters. One of the most worrying is the drying...

Must read

Iran MPs brand US Army, CIA as ‘terrorist’

AFP: Iranian MPs on Saturday branded the US Army...

Iran’s “suicide operations” chief vows to hit U.S. interests

Iran Focus: Tehran, Iran, Aug. 23 – The commander...

You might also likeRELATED
Recommended to you