P&I Limbo Risks Highlighted as Glencore Loads Iranian Fuel Oil

Monday February 8, 2016

While Glencore's charter of the Green Warrior to load fuel at Bandar Mahshahr port signals the return of Iranian crude to the international market, P&I clubs are not yet providing insurance coverage to Iran-bound vessels, according to reports.

Most P&I clubs, which consist of marine insurers owned by shipping clients and provide third-party liability insurance and pollution cover, are "not yet ready to offer protection for Iran for various reasons, re-insurance in the U.S. being one of them," said an unnamed European-based shipbroker.

The Greek-owned and fully-fixed chartered Green Warrior arrived at Bandar Mahshahr last week was reported to have loaded 80,000 tonnes of high-sulfur fuel oil bound for Singapore.

Meanwhile, France's Total has booked the tanker Atlantas, which is scheduled to pick up Iranian oil on February 12.

Lars Lange, secretary general of the International Union of Marine Insurance (IUMI), justified the reluctance of his industry to provide cover by stating at a news conference, "It all comes back to this basic principle that we have to be very, very careful with our steps; it is paramount that we comply with all sanctions."

Frederic Denefle, chairman of IUMI's legal and liability committee, added that measures are still in place prohibiting American individuals and companies from trading with the Islamic Republic, and that insurers are busy trying to determine the parameters of the prohibitions.

Insurance is just another hurdle for U.S. parties wanting to deal with Iran and follows news that some oil companies will miss out on benefiting from the lifting of sanctions due to banking system restrictions.