P&I Club imposes new rules on ship owners with plans to transport Iranian oil and petrochemicals

12-Apr-12

P&I Club has imposed new rules on ship owners covered by their insurance.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, as per Reuters. This will help the insurer to deny coverage to a member transporting Iranian output. The insurer, whose members include shipping firms Kawasaki Kisen Kaisha, Mitsui O.S.K. Lines and Idemitsu Tanker Co, has said it would only provide coverage worth a maximum US$8 mln for a tanker carrying Iran oil and petrochemicals, down from the typical US$1 billion coverage. USA and EU have tightened measures in a bid to reduce Iran's oil trade so as to stem the flow of petrodollars to forcefully halt a nuclear program suspected 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. Though 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.