In addition to the sanctions imposed on Iran by the US, the European Union announced earlier this year that it too would impose an embargo on Iranian oil. That embargo is due to take effect in less than two months, but there are signs that not all EU members are singing from the same hymn book. According to the New York Times, Britain is attempting to modify one of the provisions of the embargo relating to the ban on insurance companies that cover ships carrying Iranian oil:
Most big maritime insurers and underwriters are based in Europe, and other buyers of Iranian oil are finding it increasingly difficult to buy the required liability insurance needed to ship it as the embargo’s July 1 enforcement date looms.The provision has also been criticized as hastily conceived by many in the insurance industry, notably the associations of shipowners and charterers who pool resources to provide coverage. They are known as P&I clubs, for protection and indemnity.Even China, Iran’s biggest customer, signaled last month that it might be forced to curtail purchases partly because of the insurance problem. Reports in the insurance trade press said the China P&I Club would suspend doing business with tankers carrying Iranian oil. Japan has already done so.
Iran is due to meet with the P5+1 countries (the five permanent members of the UN Security Council plus Germany) for a second round of negotiations in Baghdad on May 23. The best hope for a peaceful solution to this problem involves strong sanctions rigorously applied. The political upheaval and the economic difficulties now stalking the European Union make it more difficult for those countries to adhere to the sanctions decisions taken earlier; anything that weakens the united front on this issue is a cause for concern.