Japan ship insurer sets new rules on Iran oil voyages

TOKYO: Ship owners covered
by Japan P&I club must
alert the maritime insurer
in advance of any plans to
transport Iranian oil and petrochemicals
that could fall
foul of Western sanctions,
the insurer said.
The United States and
European Union have tightened
measures aimed at
reducing Iran’s oil trade,
stemming the fl ow of petrodollars
to Tehran to force the
OPEC member to halt a nuclear
programme the West
suspects is intended to produce
weapons European
insurers and reinsurers will
be prohibited from indemnifying
ships carrying Iranian
petrochemicals anywhere
in the world from May, and
crude and oil products from
July.
Although Japan’s P&I
Club, which provides insurance
for shipping companies,
does not directly fall
under the sanctions regime,
it is largely dependent on
the European reinsurance
market to hedge its risk.
‘Any reinsurers including
other (P&I clubs) subject to
EU legislation will not be
able to pay out if a claim involves
a sanctioned cargo,’
said Japan’s main ship insurers
in a circular to its members
on Tuesday. ‘This will
impact the member’s ability
to make a recovery from the
club as the club is not able to
pay out on any claim in relation
to which it can make no
recovery from reinsures.
Because of this, the member
could suffer a signifi -
cant shortfall if any claim is
made.’ The insurer, whose
members include shipping
fi rms Kawasaki Kisen Kaisha,
Mitsui O.S.K. Lines,
ad Idemitsu Tanker Co, has
said it would only provide
coverage worth a maximum
$8 million for tanker carrying
Iran oil and petrochemicals,
down from the typical
$1 billion coverage. Japanese
trading houses were
reducing Iranian crude imports
from April; industry
sources said on Tuesday,
joining the country’s refi ners
in deepening cuts even after
the United States said Japan
had done enough to support
sanctions against Iran.
The United States has
pointed to Japan as an example
for other Iranian
crude buyers as the country
reduced purchases even
though it needed more oil
overall to help meet rising
domestic demand after the
earthquake, tsunami and nuclear
disaster in March 2011.