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NITC: Shipping Insurance Hurdles “Almost Resolved”

NITC: Shipping Insurance Hurdles “Almost Resolved”NITC: Shipping Insurance Hurdles “Almost Resolved”

Iran is still facing hurdles to provide maritime insurance for its tanker fleet, but the difficulties are "almost settled" on the back of months-long efforts of National Iranian Tanker Company and the Foreign Ministry, NITC executive director said on Sunday.

"International Group of Protection & Indemnity Clubs have not been able to provide full insurance cover despite the lifting of sanctions" because some of these clubs work under the US insurance policies, Ali Akbar Safaei was also quoted as saying by Shana.

This is while American insurance industry players are still banned from doing business in Iran, due to separate US sanctions that remain in place.

"Under a strategic post-sanctions plan, NITC has been in extensive negotiations with P&I Clubs since long ago to resume operations of its tankers in Europe," Safaei said.

"Difficulties are almost settled thanks to these measures and those of Iran's nuclear negotiations team, and Iranian tankers will soon join these [insurance] clubs."

Last week, Seyyed Mohsen Qamsari, deputy for international affairs at the state-run National Iranian Oil Company, said crude shipments, particularly to Europe, have hit a snag due to a lack of clarity on ship insurance, US dollar clearance and European banks’ letters of credit.

Qamsari added that Iran cannot fulfill its export goals just yet because it is still grappling with restrictions on oil shipping insurance.

The official said Iran is trying to obtain the agreement of the International Group of Protection & Indemnity Clubs for insurance coverage, but so far only nine members of the 13-member group have agreed to cover the insurance risk of Iranian tankers.

The organization protects more than 90% of the world’s crude carriers against risks, which include spills.

Iran has been using Kish P&I, backed in part by the government, for insurance on existing shipments.

Global insurance companies see a treasure trove in Iran's oil shipping market. The country has the world's largest fleet of very large crude tankers, operating 42 very large crude carriers, nine suezmaxes, five aframaxes and several other ships, with the fleet’s average age at nine years.

Moreover, Iran's plans to ramp up oil exports will translate into more voyages of its vessels worldwide and increasing demand for insurance policies against risks such as oil spills, collision and damage to or loss of property.

Iran has already resumed shipments to Europe, though apparently not by its own tankers. In February, three international vessels loaded a total of 4 million barrels of oil purchased by French major Total, Spanish refiner Cepsa and Lukoil, Russia's second largest oil producer.

Financialtribune.com