InfoAnda - Analysis: Marine insurance: the stranglehold on Iran? |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

Australia court to rule on Apple v Samsung case on Thursday | | 12 October 2011
Deathly Hallows conjures up $61.2 million Friday | | 21 November 2010
Amazon projects undercut Brazil's new green path | | 13 December 2009

Embattled Rangel Cruises To Primary Victory For 21st Term | 15 September 2010

Forum Views () Forum Replies ()

Read more with google mobile : Analysis: Marine insurance: the stranglehold on Iran? |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. Marcus David Cay Johnston Bethany McLean Edward Hadas Hugo Dixon Ian Bremmer Lawrence Summers Susan Glasser The Great Debate Steven Brill Jack & Suzy Welch Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Breakingviews Video Money Money Home Tax Break Lipper Awards 2012 Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik James Saft Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Money Clip Investing 201 Life Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Reuters TV Reuters News Article Comments (0) Full Focus Editor's choice Our best photos from the last 24 hours. Full Article Images of March Follow Reuters Facebook Twitter RSS YouTube Read Trayvon Martin's killer showed signs of injury: neighbors 16 Apr 2012 Buffett rule fails Senate vote in tax fight 16 Apr 2012 Sleepy Air Canada pilot thought Venus was a plane 16 Apr 2012 Exclusive: Briton killed after threat to expose Chinese leader's wife: sources | 16 Apr 2012 Karzai says NATO failed as 18-hour Kabul attack ends | 1:17am EDT Discussed 131 Obama paid 20.5 pct tax rate in 2011: White House 106 North Korea launches rocket amid international condemnation 96 Big gap between races in U.S. on Trayvon Martin killing Watched Shuttle Discovery prepares for final mission ... over U.S. capitol. Mon, Apr 16 2012 Transgender beauty says she wants to compete for Miss Universe Tue, Apr 3 2012 Exclusive new details of Bo Xilai murder scandal Mon, Apr 16 2012 Pictures Reuters Photojournalism Our day's top images, in-depth photo essays and offbeat slices of life. See the best of Reuters photography. See more | Photo caption Inside North Korea Rare scenes from within the reclusive state. Slideshow Tornado devastation Dozens of tornadoes tear through the Plains states. Slideshow Analysis: Marine insurance: the stranglehold on Iran? Tweet Share this Email Print Related News Brent falls below $120 on China data, Euro zone worries Mon, Apr 16 2012 Iran, big powers agree - to keep talking Sun, Apr 15 2012 Oil slips as China growth lags forecast Fri, Apr 13 2012 Exclusive: Iran ships "off radar" as Tehran conceals oil sales Fri, Apr 13 2012 China to begin delivering supertankers to Iran in May Fri, Apr 13 2012 Analysis & Opinion Romney should be proud of Massachusetts health law CNBC’s oversimplified muniland coverage Related Topics World » By Clare Baldwin and Osamu Tsukimori HONG KONG/TOKYO | Tue Apr 17, 2012 4:06am EDT HONG KONG/TOKYO (Reuters) - Marine insurance, or lack of it, may yet turn out to be the most effective sanction used by Western nations in 17 years of tightening the screws on Iran's nuclear program. A European Union oil embargo on Iran, set to take effect in July, prohibits EU insurers from covering Iranian oil exports anywhere in the world. With around 90 percent of the world's tanker insurance based in the West, the arcane world of reinsurance and liability coverage has become a powerful weapon. Iran, OPEC's second-largest producer, exports most of its 2.2 million barrels of oil per day to Asia, and the four main buyers - China, India, Japan and South Korea - have yet to find a way to replace the predominantly Western cover for the giant crude oil cargoes en route from Iran to refineries across Asia. And that could dent Iranian crude exports to key markets, particularly Japan, cutting off a valuable source of Tehran's foreign exchange income. Crude oil prices have risen close to 40 percent to above $100 per barrel since October, partly on fears over supply disruptions from Iran. "The bottleneck is insurance. If that's not settled, we will no longer be able to transport oil," said one Japanese buyer of Iranian oil, who wished not to be named. Most maritime insurers pool their coverage and tap into the reinsurance market when coverage exceeds $8 million. A typical supertanker - the biggest can ferry some 2 million barrels of crude - is covered for $1 billion against personal injury and pollution claims. "In China and Russia, the top players still need reinsurance support. The key reinsurance support and the top players always come from Europe," said Vivian Ho, chairwoman of the Marine Insurance Association at the Hong Kong Federation of Insurers. As the deadline draws near, shippers are asking whether governments should guarantee the clean-up costs of any spills. Others are checking local laws to see if they can bring in shipments on Iranian tankers insured by Iran. Japan and South Korea are lobbying EU officials to provide exemptions to the sanctions beyond July, but insurance and shipping executives believe a complete ban is likely. EU officials are due to meet on the issue in mid-May. "The issue everybody has is that somehow they are reinsured or insured into Europe," said a UK-based ship insurance broker. "There's no obvious solution after sanctions are implemented." Japanese non-life insurers have warned they will only cover a single tanker at a time carrying Iranian crude oil through the Middle East Gulf, industry sources have said. THE STATE PAYS? Without some kind of EU exemption, Tokyo and Seoul may need to provide sovereign guarantees to replace lost shipping insurance or force refiners to go elsewhere for crude supplies. A source at South Korea's Economy Ministry said Seoul was considering sovereign guarantees, but needed to assess the financial impact before making any decision. "We need to discuss this with other ministries and we're doing so now because government insurance means people's tax money. We need to check the costs and benefits," said the source who has direct knowledge of the matter. India, too, is considering sovereign guarantees - where the state covers the clean-up cost of an oil spill or other damage - for its shipping lines, or importing oil on tankers insured by Iran, a shipping industry source said. Some, though, hold out little hope that Tehran would pay up in the event of a collision or spill involving any of its 39-strong tanker fleet. "The chance is zero," said another Japanese buyer of Iranian oil, who did not want to be named. "Even if Iran said it would, we would have no collateral for that, so we don't know if they really would deliver if such accidents happened." Asked if Japan would accept Iranian P&I (protection and indemnity) insurance on independent Tehran-based NITC tankers bound for Japan, the source said: "No, we won't consider that. We have no plans to rely on Iranian P&I as we don't really know if they're going to deliver." There would also be doubts about whether Iranian-backed insurance would be able to pay out against any claim as Western sanctions prohibit transferring cash out of Iran. Similarly, many ships are heavily mortgaged, and bank loan covenants typically state that vessels must be covered by triple-A rated insurers - raising the question as to whether any stop-gap insurance provider would meet that condition. Another source at a major South Korean shipping firm noted it could be illegal to ship Iranian crude via NITC tankers insured by Iran into South Korea. "Port authorities would not allow the entry of such shipments unless they are insured by large firms such as P&I Club members." However, a source at South Korea's Ministry of Land, Transport and Maritime Affairs noted Iran-insured Iranian tankers may be allowed into South Korea, but it would be tough to let them in as Seoul is a close ally of the United States. "Without European insurance, it will be impossible for South Korea to import Iranian oil from July 1,' the source said. Iain Anderson, Singapore-based partner at law firm Ince & Co, said it was "difficult to see how sovereign guarantees could replace the essential P&I risk transfer." "Something close to half of the world's oil passes through the Strait of Singapore. How would a sovereign guarantee respond to a serious collision or grounding situation in the Strait which involves pollution from such a "guaranteed" vessel?" he said. CLOSER TO HOME Most of China's tanker fleet, owned by firms such as China Shipping, COSCO Group and Nanjing Tankers, are covered by European insurers and would not be able to transport Iranian oil unless Chinese insurers step in to fill the void once sanctions hit, analysts said. That's proving tougher since officials with private ship insurer, China P&I Club, told Reuters this month it would not provide cover for tankers carrying Iranian oil. China's biggest property and casualty (P&C) insurer, the state-owned People's Insurance Company of China Group (PICC), has yet to decide whether to provide such coverage. "It's not certain whether state-owned insurers like PICC will have to underwrite the business, or whether the government will take out the money, or whether oil companies will have to share some of the risks," said a Beijing-based marine underwriter with PICC. "The risks involved are huge and you often have to pay out more than what you get." A source with China's only state-owned reinsurer, China Re, said the firm was acting "very cautiously" on Iran-related business, and had not yet decided on whether to cover oil tankers carrying Iranian crude after July. But Chinese oil buyers may be more open than others to importing Iranian oil on tankers insured by the Middle East country, if the price is right. "If the oil is shipping from Iran and freight is at a fair rate, of course we can consider taking more," said a trader with a Chinese oil firm that imports Iranian crude. Relying more on Iranian-insured tankers could help China maintain its substantial crude imports from the OPEC producer. Iran's NITC plans to add at least 12 more supertankers by the end of next year. (Additional reporting by Samuel Shen in SHANGHAI, Meeyoung Cho in SEOUL, Nidhi Verma in NEW DELHI, Myles Neligan in LONDON and Luke Pachymuthu in SINGAPORE; Writing by Randy Fabi; Editing by Ian Geoghegan) World Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Tuesday, 17 April 2012
UK to raise Heywood murder with senior Chinese official |
Chavez battles re-election hurdle: Venezuela inflation |
Three militants killed in possible U.S. drone strike in Yemen |
Hungary PM proposes close ally as new president |
Sudan parliament calls South an enemy |
Cyber crime official optimistic on new legislation |
Zoom Technologies posts fourth-quarter loss |
Axl Rose booed at Rock Hall of Fame induction |
Bobby Brown pleads not guilty to driving drunk |
Dr Dre, Snoop Dogg bring back Tupac at Coachella |
James Bond stuntman crashes in Istanbul bazaar |
Strong quake shakes Chile, no damage reported |
U.S. looking at all options on North Korea as nuclear test looms |
Tokyo governor seeks to buy islands disputed with China |
Magnitude 7.0 earthquake hits Papua New Guinea, no tsunami alert |
Shelling, shaky truce challenge U.N. few in Syria |
Analysis: Marine insurance: the stranglehold on Iran? |
Karzai says NATO failed as 18-hour Kabul attack ends |
Smirking Norway killer Breivik pleads not guilty |
IBM may raise full-year software demand forecast |
RIM considering hiring bankers: report |
Oracle says Google's own emails show its guilt |
HTC's shares tumble; CFO change, Samsung launch weigh |
Mobile operators unconvinced by Nokia's revival bid |
Toshiba to buy IBM's point-of-sale terminal business: source |
Yahoo taps PayPal exec for new commerce group |
Check that bought Superman rights for $130 sells for $160,000 |
Court upholds convictions in John Stamos extortion plot |
Tribeca broadens film slate for festival's second decade |
Court upholds convictions in Stamos extortion plot |
Incensed Spain threatens Argentina after YPF seizure |
Exclusive: Italy puts back balanced budget goal by a year: draft |
Exclusive: China's Bo backed, then blocked murder probe against his wife: sources |
Salafi, Mubarak ex-VP fail in election appeals: paper |
Norway killer on trial: I would have done it again |
Italian kidnapped in Algeria freed after 14 months: foreign ministry |
Britain says put pressure on China in Heywood case |
Mali names interim PM after wave of arrests |
Sudan says cost no bar to recapture of oil region |
Playtech down as it eyes deal with top shareholder |
Yahoo taps PayPal exec for new commerce group |
Jolie fame to highlight humanitarian crises: UNHCR |
Females led by Adele dominate songwriting shortlist |
Shock jock Stern lawsuit vs Sirius XM thrown out |
Steve Harvey tells moviegoers how to Think Like a Man |
Dark political satire Veep takes aim at Washington |
Three Americans up for Orange female fiction prize |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph	VPN on MacOSX	BlogMeter 1.01