Key China insurer to stop covering tankers with Iranian oil.

Key China insurer to stop covering tankers with Iranian oil.(AlArabiya).HT: IsraelMatzav.Key ship insurer the China P and I Club will halt indemnity coverage for tankers carrying Iranian oil from July amid tightening Western sanctions against OPEC's second largest producer, two club officials told Reuters on Thursday. This is the first sign that refiners in China, Iran’s top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country. Iran's other top customers -- India, Japan and South Korea -- are running into similar problems, raising questions on how Tehran will be able to continue to export the bulk of its oil. Oil prices are up nearly 14 percent since the start of this year on concerns that Iranian supplies may be disrupted due to Western sanctions. Brent crude oil traded above $123 a barrel on Thursday. The China P&I Club, whose members include major Chinese shipping firms Sinotrans and COSCO Group, is the first Chinese maritime insurer to confirm it will halt business with tankers operating in Iran, following similar action in Japan. “Many ship owners want to join our club and want our club to cover this risk, but considering all these regulations from the United States and the EU, I know the China P&I club will not do that,” said a Hong Kong-based official with the insurer, which provides coverage to more than 1,000 vessels. “The China P and I club will not take the risk. We have asked our members not to go there, if they go there, they take their own risk,” the official added. Starting in July, European insurers and reinsurers will be barred from indemnifying ships carrying Iranian crude and oil products anywhere in the world, in line with sanctions on Tehran.Asian ship owners will be further limited in their search for insurance to replace their European-based coverage as the China P&I Club was seen as one alternative. It was not clear if other Chinese ship insurers were also planning to reduce tanker coverage. “I really don’t know what will happen,” said a Beijing-based Chinese industry official. “We are talking about $1 billion (per tanker). No single insurance company can handle that.”Read the full story here.