EU insurers remove cover from ships storing Iran oil
12 October 2012
Two European insurers have withdrawn cover for tankers involved in the Iranian oil trade, the first such move since tough new sanctions were imposed in July, documents obtained by Reuters show. The tankers, operated by Hong Kong's Titan Petrochemicals Group were used to store Iranian oil for top oil trader Vitol and little known shipping firm Glammarine.
EWhile the European Union sanctions bar Western-based insurers from covering tankers that carry, rather than store, Iranian oil, the documents show the insurers were not prepared to risk falling foul of the curbs.
The two are North of England P&I Association, Titan's main insurer and Gard, the world's second-largest marine insurer.
Titan must now find new insurers to continue operating its floating storage business off Malaysia, one of the biggest in Southeast Asia. That could prove difficult if other Western-based insurers, which cover around 90 percent of the world's tanker fleet, also decide to shut
The company's floating oil storage business generated more than $64 million in revenue last year, about a fifth of Titan's total revenue, according to the firm's annual results. Titan hires the floating storage vessels under long-term contracts with independent shipowners such as Norway's Frontline
Frontline, the world's largest independent oil tanker operator, has withdrawn the charter for at least one of Titan's fleet due to the ship's involvement in the Iranian oil trade, a Frontline official told Reuters.
The European Union also provisionally approved substantial new economic sanctions against Iran over its nuclear programme, effective from October 15.
An EU diplomat, speaking on condition of anonymity, said the new measures include a ban on financial transactions, with some exceptions for those involving humanitarian aid, food and medicine purchases. Some other types of trade may also be allowed.
EU states will also be banned from extending short-term guarantees for trade with Iran, importing natural gas from Iran and selling metals and graphites to Iran.