South Korea asked the European Union to extend an exemption for certain insurance contracts on tankers carrying Iranian crude after July 1, when sanctions start to prohibit the coverage.
The governments of South Korea and Japan are in talks with the EU on the insurance rules for transporting Iranian oil, the Korean Ministry of Knowledge Economy said in an e-mailed statement today. The 27-nation EU in March agreed on a three-month exemption for third-party liability insurance and environmental-liability insurance.
The EU has joined the U.S. in strengthening sanctions on Iran in an effort to curb the Persian Gulf nation’s nuclear program. Insurers of almost all the world’s tankers follow EU law, meaning that the planned insurance restrictions will have an impact beyond the bloc. South Korea may suffer as it imports almost all of its crude and the embargo on Iranian oil might boost global prices, the ministry said in today’s statement.