Shipping insurance ban on Iran oil, petchems, gas to be lifted: Japan P&I club

A ban on shipping insurance that has restricted the transport of Iranian oil, petrochemicals and natural gas products for about three years will be lifted as a result of the final agreement reached Tuesday between Iran and six world powers, the Japan Ship Owners’ Mutual Protection & Indemnity Association said Wednesday.

The association would be able to issue reinsurance to Japanese shipowners for carrying Iranian oil immediately after sanctions are lifted, a Japan P&C source said.

While noting implementation of the agreement, the Joint Comprehensive Plan of Action, or JCPOA, managed in the EU and the US has yet to emerge.

Japan P&I Club said in a statement: “It is clearly intended that all UN Security Council sanctions as well as multilateral and national sanctions related to Iran’s nuclear program will be lifted.

“It is clear that the prohibition on the provision of insurance or reinsurance to Iran or the Government of Iran, an Iranian legal person, entity or body … will be lifted,” Japan P&I Club said.

“The current prohibition in respect of the transport of oil, petrochemical and gas products will also be lifted.”

Under the agreement Tuesday, multi-national sanctions against Iran will be lifted under the terms of JCPOA.

The deal “provides that adoption will occur 90 days after the endorsement of the JCPOA by the UN Security Council or at an earlier date by mutual consent of all JCPOA participants, at which point the JCPOA comes into effect,” Japan P&I Club said.

Japan P&I Club said the EU and its member states will adopt a regulation taking effect on the date of implementation terminating all provisions of the EU nuclear-related economic and financial sanctions.

Japan, a major importer of Iranian oil, introduced a supplementary insurance scheme in June 2012 to enable crude imports from Iran in the wake of a ban by the EU on protection and indemnity cover for tankers carrying Iranian oil.

From April 1, the Japanese government started providing up to Yen 877.8 billion ($7.98 billion) of shipping insurance cover for tankers carrying Iranian crude for fiscal 2015-16 (April-March) due to uncertainty over Western sanctions against Iran.

The Japanese insurance cover will range from Yen 990 million to Yen 877.8 billion per tanker in fiscal 2015-16, which began April 1.

The Japanese minimum shipping insurance cover reflects Japan P&I Club’s maximum reinsurance cover of $9 million for its own 2015-16 fiscal year, which started February 20.
Source: Platts