China, the biggest buyer of Iranian oil, will take steps to prevent European trade sanctions from disrupting shipments from the Persian Gulf nation, said tanker operator China Shipping Development Co.
The government has discussed ways to help shipping companies get insurance once sanctions against Iran take effect July 1, General Manager Yan Zhichong told reporters in Hong Kong today. The ministry of transport and National Development Reform Commission held special meetings on the issue, he said.
“The attitude is clear -- we must make sure that the volume of our shipments will not drop,” Yan said. “The government regards it as a very important issue.”
China may nominate an insurer to cover oil shipments from Iran to ensure that supplies can continue, Yan said. European Union sanctions on Iran threaten to disrupt oil shipments because about 95 percent of the world’s tankers are insured against risks such as oil spills by the 13 members of the London-based International Group of P&I Clubs, according to Andrew Bardot, its secretary and executive officer.
China Shipping Development had a fleet of 72 tankers at the end of last year. The company is part of state-controlled China Shipping Group Co., the nation’s biggest sea-cargo carrier after China Ocean Shipping Group Co.
China Shipping so far hasn’t had any disruptions in its cargoes from Iran, Yan said. The Asian nation is underwriting some oil shipments, according to the International Energy Agency.
As originally agreed, the EU embargo approved Jan. 23 would affect coverage for vessels carrying Iranian oil, insurers and shipowners said. Now the 27-nation bloc is considering an exception for “third-party liability insurance and environmental liability insurance,” according to a draft of the regulation obtained by Bloomberg News.
The proposal would allow tankers owned outside the EU to continue carrying Iranian oil even if they are insured in Europe, Bardot said March 14. The draft has been sent to national governments and the bloc hopes to complete the regulation within a month, according to an EU official with knowledge of the matter.
About 22 percent of Iranian oil exports go to China, according to U.S. Department of Energy estimates. The Asian nation opposes trade restrictions against Iran and said oil sanctions aren’t “constructive,” the official Xinhua News Agency reported Jan. 26, citing comments from the Ministry of Foreign Affairs.
The EU and U.S. have imposed sanctions on Iran because of the nation’s nuclear program. Iran has said the project is only for civilian use.