Iran: oil shipping insurance problem not settled yet

Baku, Azerbaijan, March 5 By Fatih Karimov - Trend: A senior Iranian official confirmed that the country is still facing problems regarding insurance of its oil shipping, Mohsen Ghamsari, director of international affairs at National Iranian Oil Co (NIOC), said. Ghamsari said that Iran is trying to obtain agreement of the International Group of P&I Clubs for insurance coverage, meanwhile so far only nine members of the group have agreed with covering insurance risk of the Iranian tankers, the oil ministry’s official SHANA news agency reported March 2. He further said that Tehran needs to satisfy all 13 members of the organization to settle the problem. The organization’s 13 members protect more than 90 percent of the world’s crude carriers against risks, which include spills. Ghamsari said that many of Iranian oil buyers demand insurance covered by members of the International Group of P&I Clubs for Iranian tankers, which is currently not possible. He added that it is not clear when the problem will be settled. Iran is using Kish P&I, for insurance on existing shipments to India, China and Turkey, Ghamsari said. The sanctions had cut Iranian crude exports from a peak of 2.5 million barrels per day (bpd) before 2011 to just over one million bpd in recent years. Iran is working to regain market share after sanctions relief and exports had already risen by 500,000 bpd in February. But the country's crude shipments, particularly to Europe, have been complicated by a lack of clarity on ship insurance, US dollar clearance and European banks' letters of credit. Reuters reported March 1 that securing insurance for cargoes carrying oil from Iran is likely to take another two to three months, potentially limiting Iran's ability to quickly ramp up oil exports. The US still prohibits its US individuals or companies from trading with Iran and insurers are trying to clarify details on the parameters of the US sanctions. Stay up to date with latest Iran news on our specialized Facebook page Follow us on Twitter @TRENDNewsAgency