Japanese shipping companies are likely to load Iranian oil on two VLCCs in late July, with the first cargo to be loaded as early as July 22 after the expected signing of new insurance contracts with the government next week, sources close to the matter told Platts Wednesday.
The shipping companies could load up to 4 million barrels of Iranian oil in late July as they have cleared concerns about the loss of protection and indemnity insurance cover as a result of EU sanctions against Iran, sources said.
The sanctions came into effect July 1.
The companies are signing the insurance contracts with Yuichiro Hata, the Minister of Land, Infrastructure, Transport and Tourism, to make up the loss of protection and indemnity insurance cover, sources said.
The expected completion of the contracts with the government will come after the shipping companies sign supplementary contracts with the Japan P&I Club to make up their loss of insurance cover after June 30, sources said.
A new Japanese law which came into effect on June 27 compensates Japanese buyers of Iranian oil for the expected loss of P&I cover. Until the end of June, Japanese shipowners could obtain up to $7.6 billion in cover for eventualities ranging from an oil spill to wreck removals and fishery claims. But this subsequently dropped to $8 million, the maximum the Japan P&I Club would be able to guarantee once the EU sanctions took effect.
The signing of the contracts follow a notification from the Japanese government on June 29 to make new insurance contracts between Japanese shipping companies and the government valid from July 1.
Source: Platts