The European Union has allowed some insurance contracts for Iranian oil until 1st July, scaling back an earlier plan to ban coverage for Iran cargoes altogether.
According to Bloomberg, EU foreign ministers approved detailed rules for enacting sanctions against Iran outlined in January. Because insurers of most the world’s tankers follow European law, its provisions on insurance tied to Iranian oil have an impact beyond the EU’s borders.
To address a UK request for more study on the impact that the tighter loophole for third-party liability insurance and environmental-liability insurance will have on global oil prices, the Ministers agreed to review the exemption before a meeting in May.
On 23rd January, the EU banned oil imports from Iran while allowing existing contracts, as well as the insurance attached, to continue until 1st July.
This undertaking would affect insurance for 95% of the world’s tankers that are covered by the London-based International Group of P&I Clubs, according to insurers and shipowners, reported Bloomberg.
Initial drafts of the EU’s more detailed rules for enacting the trade penalties emerged in February, when the bloc’s regulators proposed exempting insurance against the risk of tanker collisions and spills from the restrictions.
The recent decision to permit third-party liability insurance and environmental-liability insurance until 1st July will allow tankers owned outside the EU to continue to carry Iranian oil for three more months even if they are insured in Europe.
Owners of at least 100 large tankers, including Frontline and OSG, said last month they would no longer call at Iranian ports because of the insurance ban.
The International Group has pressed the EU to grant an exemption for insurance against crashes and pollution, Andrew Bardot, the organisation’s secretary and executive officer, said last week, reported Bloomberg.