A U.S.-based insurer to the global shipping industry said it got government authorization to cover non-American companies transporting oil from Iran, potentially helping the Persian Gulf country to revive exports of crude and petroleum products following the lifting of sanctions last month.
The Office of Foreign Assets Control on Feb. 5 “prospectively removed” the restriction that previously prevented the American Club from providing cover for Iranian cargoes, the New York-based insurer said in a circular on its website. The club is “now generally available for non-U.S. person members’ transportation of crude and products to and from Iran,” according to the notice.
In terms of Iranian exports, insurance “is where the biggest problem has been and now that seems to have been resolved, at least that’s one problem out of the way,” Erik Nikolai Stavseth, a shipping analyst at Arctic Securities ASA in Oslo, said by phone. It’s likely that European insurers will follow since the U.S. club has been cleared to provide cover, he said.
Iran is trying to rebuild its oil output after sanctions were lifted in January that had restricted those sales for the prior four years. U.S. curbs on insurers weren’t eased at the same time as the restrictions on exports were stopped. The nation was expected to increase crude oil production by 100,000 barrels a day, or 3.7 percent, a month after sanctions were lifted and by 400,000 in six months, according to the median estimate of 12 analysts and economists surveyed by Bloomberg in mid-January.
A spokeswoman for OFAC wasn’t immediately available to comment.
The American Club is one of 13 members of the International Group of P&I Clubs in London, who collectively cover more than 90 percent of the global tanker fleet against risks including oil spills. The IG said just before sanctions were lifted against Iran that U.S. curbs were still causing obstacles to its members’ ability to cover Iranian cargoes.
–With assistance from Grant Smith and Brian Wingfield.
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