European Union holds back on Iranian oil sanctions, considers exemptions for insurers

Maritime InsuranceThe European Union has been deliberating on how to handle sanctions imposed against Iran since late last year. Iran has been the target of oil sanctions from much of Europe and the U.S. These sanctions would have a significant impact of the transportation of oil from the country and much of the Middle East. One of the major problems that would arise from the sanctions concerns the insurance industry. If the sanctions are enacted, insurers in Europe and the U.S. will no longer be able to provide coverage for ships that carry Iranian oil. The EU was scheduled to rule on whether exemptions would be granted to insurance companies this month, but has announced that the decision will be postponed.

The decision to postpone the decision comes from pressure of Asian oil importers. These importers are hoping that insurers will be granted exemption from the sanctions so that business can continue. The importers claim that oil coming out of Asia would be unfairly impacted by these sanctions even though a great deal of it comes from the Middle East. EU legislators have pushed the date of their decision back to July 1.

Insurers are torn on the issue. The majority of the maritime insurance market is served by the UK, which has been adamant in its stance on the Iranian sanctions. Some insurers claim that the sanctions are a matter of politics, not business, and have chosen not to get overly involved. Others share a different opinion, claiming that the sanctions would have a major, negative effect on the industry as a whole.

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