Bloomberg reported that Japan will load its first Iranian crude cargo backed by sovereign guarantees since sanctions disrupted coverage in the international reinsurance market.

Three officials from the refiners and Japan’s trade ministry said that JX Nippon Oil & Energy Corporation and Idemitsu Kosan Company will load about 1.7 million barrels of Iranian crude on the very large crude carrier Ryuho Maru on about July 20th 2012 at Kharg Island, the country’s biggest oil export terminal. The tanker, owned by Iino Kaiun Kaisha Limited will be backed by the Japanese state.

They said that Japan’s Iranian crude imports will fall in July because refiners were unsure whether the sovereign insurance would be available when they planned July loading schedules last month. Japan’s parliament passed a bill on June 20th 2012 to provide USD 7.6 billion of guarantees to tanker owners that carry Iranian oil. European Union sanctions, introduced as an attempt to persuade Iran to halt its nuclear program, took effect July 1st 2012.

According to a statement from the transport ministry, the program gives ship owners sovereign guarantees to replace reinsurance that Japan’s P&I club previously obtained under a claims sharing agreement with the London based International Group of P&I Clubs. The coverage protects against third party liability and environmental accidents.

Source - Bloomberg

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