Due to European Union sanctions, starting July 1, Europe'sProtection and Indemnity (P&I) clubs will no longer be able toinsure tankers carrying Iranian crude oil. The EU's efforts topunish Iran for its nuclear program means that Iranian oil buyerswill lose access to a market that insures 95% of the world's tankershipments against spills and collisions.

The market seems to remain complacent about this – forecastersdo not expect sales to drop dramatically, and traders are hopingincreased production in Saudi Arabia and North America will besufficient to offset the drop in Iranian exports.

The lack of coverage could stop exports entirely. Majorimporters have lobbied to relax or remove the ban withoutsuccess.

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