Ship insurers have stepped in to help plug a shortfall in cover for transporting Iranian oil, resulting from the fact that U.S. reinsurers are still restrained by Washington’s sanctions.
The International Group of Protection and Indemnity (P&I) Clubs has raised the reinsurance level for shipping Iranian crude to a maximum of $580 million per tanker, up from $80 million, with immediate effect.
According to Platts, although this does not fully make up for the missing US reinsurance cover as a result of the US’ ongoing sanctions against Iran, it could be seen as sufficient for Asian or European buyers for their shipments of Iranian oil.
In spite of significant improvements in the P&I reinsurance cover, the Japanese government, meanwhile, will continue providing full insurance cover for shipping Iranian oil beyond April.
The $580 million cover is still considerably less than the normal liability cover of $7.8 billion per ship, according to Reuters.
(Sources: Reuters, Platts)