EU Insurers Cut Tanker Coverage Over Iranian Oil

New and harsher sanctions imposed by the European Union in July over Iran have spurred insurers themselves to interpret the rules more strictly rather than risk falling afoul of regulators. Two European insurers have therefore ceased to provide coverage for oil tankers that were used to store, rather than transport, Iranian oil.

Reuters reported Friday that this is the first such action since the new sanctions went into effect. EU sanctions prohibit Western based insurers from covering ships that carry Iranian oil. However, it had been revealed earlier that tankers operated by the shipping and oil storage company Titan Petrochemicals Group of Hong Kong were being used to store Iranian oil for the oil trader Vitol and the shipping firm Glammarine.

Titan’s main insurer, which has withdrawn coverage for Titan, was the North of England P&I Association. Mike Salthouse, director of North Insurance Management, had been quoted saying on behalf of the association in September that “Titan’s conduct breaches the spirit if not the wording of U.S. and EU sanctions against Iran.”

He continued, “Were the association to continue to provide insurance to the Titan fleet, we have concluded that there would be a high probability of further breaches of sanctions.”

Titan lost Gard, its other insurer and the second-largest marine insurer in the world, in September. Gard had provided coverage for one of Titan’s floating oil storage vessels.