Global Insurers to Resume Full Coverage for Iran Oil Exports

Global Insurers to Resume Full Coverage for Iran Oil Exports
Global Insurers to Resume Full Coverage for Iran Oil Exports

Global shipping insurers have devised a way to ensure nearly full coverage for Iranian oil exports from next month after striking a deal to provide cover without involving US-domiciled reinsurers, officials in Tokyo and London said.

The reluctance of US firms to handle Iranian goods had greatly limited the number of reinsurers of cargoes, but the new arrangements - which essentially allow re-insurance of ships without the involvement of US-firms - should boost the number of eligible shipments, Reuters said in an exclusive report.

That will provide a boon to Iran, trying to raise oil exports after most sanctions were lifted last year, though banking restrictions that remain in place could cap any major rise in exports.

"There will be no US-domiciled reinsurer participation on the 2017 IG reinsurance program," Andrew Bardot, secretary and executive officer at the International Group (IG) of P&I Clubs in London told Reuters on Tuesday.

The new arrangements take effect on Feb. 20, he and other officials said.

"This will substantially address the potential shortfall in reinsurance recoveries in the event of Iranian-related claims," Bardot said in an email.

The P&I Clubs has significantly extended its coverage for the large fleet of the National Iranian Tanker Company.

According to the NITC chief Sirous Kianersi, all ships and vessels owned by the company are now under the cover of the International Group Agreement—an insurance framework observed by P&I clubs.

The group protects more than 90% of the world’s crude carriers against risks, which include spills. Iran largely used Kish P&I, backed in part by the government, for shipping insurance when sanctions were in place.

NITC has expanded its fleet to 69 tankers and very large crude carriers with a total capacity of 15.5 million tons.

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