Oil insurance sanctions in full force against Iran

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Tehran is now ready to dodge the problems that the lack of tanker coverage had caused.

The oil insurance sanctions against Iran that have been put into place by the European Union had been putting a stop to a large number of the crude exports from that country starting on July 1, but it has now built a new effort to insure its own tankers to sidestep the coverage issues.

Iran is preparing to work around the coverage obstacles.

The country has set aside billions of dollars so that it will be able to provide its own oil insurance. This is one of several recent efforts that it has made to be able to resume the exports of its crude. Though Western sanctions have taken quite a chunk out of the shipments out of the country, this should make it possible to reinstate many of them.

The E.U. sanctions stopped any of its oil insurance companies from covering tankers from Iran.

As approximately 90 percent of the oil insurance for Iranian tankers had come from insurers in the E.U., this meant that most of the country’s exports of crude were suddenly out of coverage. This forced many nations to stop their imports, as the risk was too high.

The moment that the European Union announced that the sanctions would be put into place, the Iranian government began setting aside billions of dollars so that it would be able to create its own oil insurance coverage. This means that any country that ceased its imports based solely on a lack of coverage will be able to begin receiving shipments once more.

NITC, a major tanker operator from Iran had revealed that it had secured oil insurance in June. This coverage was from a privately owned Iranian insurer, Kish P&I. The protection is worth $1 billion in case of a spill or collision.

The majority of the buyers of crude from Iran are from Asia. They had been struggling to find oil insurance to replace those from the European Union, sending Iran’s exports through the floor. Though Tehran had been stating that it would be insuring any foreign tankers coming into its waters, it wasn’t until now that it made any mention of how the oil insurance would be paid should an accident occur.

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