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Iran to spend "several billion dollars" insuring its oil

Iran Materials 29 July 2012 13:54 (UTC +04:00)
Iran's Oil Ministry announced it will provide "several billion dollars" to insure Iranian oil tankers.
Iran to spend "several billion dollars" insuring its oil

Azerbaijan, Baku, July 29 /Trend M. Moezzi

Iran's Oil Ministry announced (today) it will provide "several billion dollars" to insure Iranian oil tankers.

Mohammad-Ali Khatibi, the director of international affairs at the National Iranian Oil Company, told the Iran newspaper, "Iran is ready to provide complete insurance coverage to oil buyers". "The guarantees offered by Iranian insurance for oil tankers are no different than those offered by Western insurance."

On Friday, Fars news agency cited an unnamed "knowledgeable source in the insurance industry" as saying several billion dollars would be put at the disposal of the Central Insurance of the Islamic Republic of Iran (Bimeh Markazi) with 10 percent of that already paid.

Starting July 1, the European Union began implementing its oil and insurance sanctions against the Islamic Republic. The sanctions mean tankers carrying Iran's oil, petrochemical products and oil transportation equipment cannot be insured by European insurance companies.

With the oil and insurance sanctions going into effect, there's even the possibility that Iranian oil tankers could be seized in international waters and ports.

Western insurance companies cover 95 percent of the world's oil tankers, and before the sanctions went into effect they insured 90 percent of Iran's oil tanker fleet.

In recent weeks India and China, two of Iran's biggest oil customers, have asked Tehran to insure and transport the oil they buy. National Iranian Oil Company officials say they have 47 oil tankers which can transport 11 million tonnes of oil.

Oil tankers are usually insured up to a billion dollars because of the danger of their oil spilling
into the oceans and other hazards.

The greater pressure on Iranian oil tankers comes at a time when, according to the International Energy Agency, the Islamic Republic is using them to store 42 million barrels of oil it has been unable to export.

The Iranian oil industry's difficulties are the result of Iran's conflict with the West, and Western
powers are seeking to compel the country toward more "transparency" in its nuclear programme.

Iran continues to insist its programme is peaceful and poses no worries for the West.

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