LONDON (Reuters) – A ban on European Union insurers covering Iranian oil exports has forced shipowners to fall back on new, untested insurance providers, raising fears that governments may have to pay in the event of an oil spill.
The July ban, part of a range of Western sanctions aimed at forcing Iran to scrap its disputed nuclear programme, has cut off the Iranian oil trade from Europe's so-called Protection and Indemnity (P&I) clubs, which account for the majority of cover for the tanker market.
These specialist insurers dominate the market for insuring ocean going ships against pollution and injury claims, the biggest costs when a tanker sinks, leaving vessels transporting Iranian crude with limited alternative options.
“The unavailability of reliable insurance is a risk for states, and particularly littoral states whose waters ships like this could be passing through,” said Nigel Carden, deputy chairman of the UK P&I club.
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