Iran begins taking matters into its own hands concerning insurance coverage
Iran continues to struggle with strict sanctions enacted against it by the European Union concerning the country’s controversial nuclear program. As the sanctions begin to take their toll on the transportation of oil from the country, Iran is looking to take matters into its own hands. The country has entered into the insurance business, offering shipping companies coverage as a means to sidestep the sanctions imposed by the EU. The insurance coverage being offered by Iran would not only cover native shipping companies but foreign companies as well.
Sanctions have banned insurers from providing coverage to shipping companies transporting Iran oil
The EU sanctions were enacted earlier this year despite calls for delays from several insurance organizations and countries that represent the European Union. Notably, the United Kingdom, which accounts for the vast majority of the world’s maritime insurance industry, worked to convince the EU to delay its sanctions. The sanctions were believed to have powerful economic consequences, as they banned insurance companies from providing coverage to ships and tankers carrying Iranian oil. It had been expected that the price for oil would increase dramatically due to the sanctions, but such an event has yet to be seen.
Iran insurance to provide protection from all risks and hazards
While oil prices may not have skyrocketed, Iran has seen a sharp decline in its oil exports. Because of its position in the oil industry and the benefits this position has brought to the country’s economy, Iran has been looking for ways to overcome the EU sanctions. As such, the country has begun to focus on providing insurance coverage for the shipping companies that it has been working with for several decades. According to the National Iranian Oil Company, the insurance provided to shipping companies will account for all risks and hazards that these companies could face whilst transporting Iranian oil.
Oil shipments to be uninterrupted thanks to new insurance plan
Iranian insurance companies have agreed to provide the expansive coverage needed to keep ships safe. Backed by its insurance plan, Iran officials have said that the shipment of oil will be able to continue uninterrupted to the country’s major clients: China, India, Japan, and South Korea. Time will tell whether foreign shipping companies will be inclined to adopt Iran’s insurance plan.