The anticipated hike in the insurance, set to come into effect 1st April, follows a decision by the International Group of P&I Clubs to increase its maximum reinsurance cover by 2.5% year on year in its 2015-16 fiscal year, which started last Friday, sources told Platts.
An official at the Ministry of Land Infrastructure, Transport and Tourism declined to give Japan's insurance cover for carrying Iranian oil in the new fiscal year as its budget for the upcoming fiscal year is yet to be finalised when approached by the newswire.
In the current fiscal year ending March 31, the Japanese government is providing up to Yen764.4 bill ($7.88 bill) per VLCC for carrying Iranian crude under a government insurance framework.
The International Group has lifted its maximum reinsurance cover to $8.1 bill for the new fiscal year, up from $7.9 bill, for problems ranging from an oil spill to wreck removal and fishery claims, the sources said.
That increase is due to a 3.8% year-on-year rise in its members' gross tonnage to 1,047 bill, up from 1,009 bill gt before, the sources said.
However, the Japan Ship Owners' Mutual Protection and Indemnity Association (Japan P&I Club), has maintained its maximum reinsurance cover at $9 mill for its 2015-16 fiscal year.
Japan imported an average 168,777 barrels per day of crude from Iran in 2014, down 4.9% from the previous year, according to data compiled by the country's Ministry of Economy, Trade and Industry.
Iran was the sixth largest crude supplier to Japan last year, accounting for 4.9% of its total imports.
Meanwhile, the head of NITC has said that the West should make restitution for years of sanctions against the tanker giant.
NITC chief Ali Akbar Safaei said this week that Western governments have, through their sanctions, depraved the international maritime shipping services of one of the biggest capacities in the field, Mehr news agency reported.
Safaei highlighted NITC’s determination to pursue its rights through international legal channels, adding that the West must make reparation for the company’s losses as the sanctions are “politically motivated.”
Last July, the Luxemburg-based General Court ruled there were no grounds to blacklist the NITC in the European bloc after the company contested the designation.
The EU’s second-highest court ruled against the sanctions imposed by the 28-nation bloc on NITC for its alleged role in Iran’s nuclear energy programme.
However, on 12th February, the EU governments agreed to put NITC back on a list of sanctioned companies.