Chinese company asks Iran to insure oil tankers

Iran Materials 13 May 2012 20:40 (UTC +04:00)

Managing-Director of Iran's Kish Bilateral Insurance Institute Mohammad Reza Mohammadi Banayi announced on Sunday that a giant Chinese oil tanker company has requested his institute to give insurance coverage to its tankers, Fars News reported.

"The Chinese company asked for our institute's assistance to receive insurance services for (its) oil tankers," Mohammadi Banayi told FNA.

He said his company can provide insurance coverage only for its members, which are the Iranian ships working for the Iranian Oil Tankers Company.

"At present, our institute is not allowed to make an insurance commitment to foreign ships," he added.

Iran is the second largest producer in the Organization of Petroleum Exporting Countries and has the second largest oil and gas reserves in the world.

In shipping, third-party liabilities such as oil pollution, wreck removal and damage to port property are commonly referred to as protection and indemnity (P&I). This is separate from insurance covers for a ship's hull and machinery.

Globally, such third-party risks are insured with the International Group of Protection and Indemnity Clubs (IG Clubs), a 13-member group based in London that provides covers for oil pollution and wreck removal for at least 95% of the world's ocean-going ships by capacity.

Under the proposed EU sanctions against Iran, the IG Clubs will no longer be able to provide this cover to ships that haul Iranian oil from 1 July.

The shipping insurance ban was finalized in April but the UK won temporary exemptions to allow European companies to provide liability and environmental insurance on shipments of Iranian crude until July 1.

It would require a unanimous decision by all 27 member states to allow any change to the details of the embargo and the shipping insurance ban.

Given a second round of talks between Iran and six major powers set to take place in Baghdad May 23, the EU may opt for some changes in the review, or annul the sanctions totally.

At a meeting Thursday, EU ambassadors agreed that the review won't be discussed at a meeting of foreign ministers in Brussels on Monday. A discussion of the review had been left open as a possibility but has now been removed from the agenda, the diplomats said.

Initially, the review of the embargo, which is the EU's strongest action yet against Iran's nuclear program, was supposed to take place by May 1. But in April, member states agreed to gave themselves extra time to carry out the review.

The review is supposed to look at member states' ability to cope with the full oil embargo and whether it will threaten the security of their energy supplies. It is also supposed to consider the embargo's impact on international energy markets.

The Iranian oil ministry in a statement in late January downplayed the effects of the US and EU's unilateral oil sanctions against Tehran, and said such embargoes will merely harm the European economies and oil consuming countries.

European sanctions against Iran's oil exports will affect the world economy and hurt European and non-European countries, the statement said.

Later, Tehran summoned the ambassadors of Italy, Spain, France, Greece, Portugal and the Netherlands to protest at the EU's unilateral sanctions against Tehran over its peaceful nuclear program, and warned them that it would soon stop oil exports to these countries if they do not reverse their decision.

After the EU's decision to embargo Iranian oil supplies, Tehran stopped exports first to France and Britain and very recently to Greece and Spain. Following Tehran's oil sanctions against the four and its warning to other EU members, oil prices started soaring in the world markets.