U.S. Sanctions Trigger Lloyd’s of London’s Refusal to Insure Iranian Petroleum Imports

July 9, 2010

While the oil spill on U.S. shores remains to be stopped, last week President Obama signed into law new sanctions designed to limit fuel imports into Iran, and increase the Islamic Republic’s international isolation.

On the heels of that announcement came another: the British insurance company Lloyd’s of London, known for insuring high risk properties, has stated it will no longer insure or reinsure petroleum being shipped into Iran.

In a statement earlier today, the insurer’s general counsel Sean McGovern told reporters from Reuters, “The U.S. is an important market for Lloyd’s and, in recognition of this, the market will not insure or reinsure refined petroleum going into Iran. Lloyd’s will always comply with applicable sanctions.

The United States and its European allies suspect Iran is trying to build an atomic bomb. Tehran has said its nuclear program is for the peaceful generation of electricity.

Already, Iran has been finding it difficult to engage in financial trading. Many oil companies, trading houses, and the like have ceased doing business with the country, out of fear of violating U.S. sanctions.

According to Reuters, Iran is buying about half of its July gasoline imports from Turkey, with the rest coming from Chinese sources, since most other suppliers will not sell to them.