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Japan considers guarantees for ships to carry Iran oil

Japan considers guarantees for ships to carry Iran oil
Tokyo: Japan is mulling a new law to offer sovereign guarantees for its ships to allow them to continue importing Iranian crude oil after EU sanctions come into effect from 1 July 2012.

The proposed legislation would see the Japanese government and shipping companies sign an insurance contract and the shipping companies would pay the premiums to the government.

The Japanese government would seek to pass the new legislation by early June if the 1 July EU proceeds, according to local reports.

Around 90% of the world's tanker insurance is based in the West, hence the EU measures threaten shipments to Iran's top Asian buyers like China, India, Japan and South Korea.

The Japan P&I club would be forced to slash its cover on oil spills for a tanker carrying Iranian oil to $8m from 1 July versus $1bn now.