UK To Push For Delay Of Iran Reinsurance Ban, Iran Eyes Private Sector Exports

EU diplomats confirmed on 9 May that the UK is pushing to delay a 1 July deadline for the imposition of a ban on EU-based reinsurers offering protection and indemnity (P&I) coverage for the shipment of Iranian crude oil by third parties. Shipping companies transporting Iranian crude to Japan and South Korea utilize EU, and in particular London-based, reinsurers to protect themselves from P&I liabilities. “Britain will be pushing the EU to postpone the ban on P&I insurance by six months,” a senior diplomatic source told Reuters . “The main reason [for the UK initiative] is pressure from Japan and South Korea, as they would struggle to buy oil after 1 July.”

Last week International Energy Agency (IEA) Executive Director Maria van der Hoeven said that Iranian exports to the OECD states have diminished by 200,000-300,000 b/d since the EU’s oil boycott began on 23 January. Iran’s Ministry of Petroleum responded by announcing on 9 May that it has given a private sector oil products exporting union permission to handle up to 20% of Iran’s crude oil exports – equivalent to around 400,000 b/d – as a way of bypassing international sanctions. ISNA news agency quoted Hassan Khosrojerdi, head of the oil products exporters’ union, as saying that the ministry would allow direct sales by the Iranian private sector to foreign refineries. The National Iranian Oil Company (NIOC) would not be involved in the marketing process.

In related news, Turkey increased its imports of Iranian crude to 1.17mn tons in March 2012, the highest monthly total since July 2011, the Turkish Statistical Institute (TUIK) reported on 8 May. MEES understands that the increase reflects an attempt by refiner Tupras to build up its crude stocks in view of Ankara’s obligation to the US and EU to reduce Iranian imports by an average of 20% in 2012. Tupras is not likely to implement the sanctions against Iran before the renewal of its annual supply contract in August (MEES, 9 April).

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