Hong Kong insurers shy away from Iranian oil

The tightening sanctions on Iranian oil sales continue to put pressure on oil transportation companies, with Hong Kong insurers now insisting they will not cover oil tankers coming from the Middle Eastern nation, according to Reuters.

Sanctions levied by the U.S. and Europe will soon begin to impose harsh consequences on companies that insure tanker ships carrying Iranian crude, causing insurers in those regions to end such offerings.

Because Hong Kong insurers rely on these international firms to provide reinsurance to distribute the risk of covering the massive oil tankers, they have in turn been forced to end or drastically reduce their coverage of Iranian crude oil.

"The effect of this is not on the ownership or carriage of the oil but on innocent third parties who would be affected if one of these ships had an accident and spilled oil," Arthur Bowring, managing director of the Hong Kong Shipowners Association, told Reuters. "Liability insurance covers liability to third parties and removing this just does not make sense."

Bowring explained that the best possible option would be for the Chinese government to pick up the risk.

Not everyone has backed away from Iran, however, as UPI reports that India is considering restarting a gas pipeline project to Iran.

More information on the Iranian energy sector can be found at PennEnergy's Research area.



Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...

Latest PennEnergy Jobs

PennEnergy Oil & Gas Jobs