US and EU ease Iran sanctions, insurers urge short contracts

Under the easing of sanctions, EU owned or registered vessels will be allowed to carry Iranian oil cargoes, although the ban on importing Iranian oil and petroleum into the EU remains in place. Current bans on importing and carrying Iranian product cargoes are lifted, leaving them open to export and import, including into the EU. Natural gas cargoes remain under sanction, with the purchase, transport and import all banned.

Despite a lifting of the general rule preventing European companies chartering vessels "designed for the transport or storage of oil and petrochemical products" to Iran, designated entities such as the National Iranian Tanker Company (NITC) remain under sanction with chartering to NITC outlawed.

Complications are foreseen where companies are forced to interact with designated entities, such as port operators and agents. In such circumstances, the European Commission has advised that owners and their P&I clubs seek advice from competent authorities, as payments may be allowed to the frozen accounts of designated entities. Further difficulty may be faced in finding a bank willing to process the transaction, however.

Insurers will once again be free to insure cargoes that meet the above requirements, including oil and petroleum cargoes bound for China, India, Japan, Korea, Taiwan and Turkey.

With no clear message on whether a grace period will be allowed for contracts underway, the International Group of P&I clubs, which insures around 90% of the world fleet, has advised shipowners to only enter into contracts which will be executed by 20 July.

The US is expected to mirror the lifting of EU sanctions as closely as their legal system allows, with full details to be revealed today.

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