The Japanese government may yet step in to to compensate for the insurance shortfall faced by tankers carrying Iranian oil.
According to Reuters, the Japanese transport ministry has held discussions with the Japan Shipowners' Association regarding the provision of insurance.
Speaking at a conference in Tokyo yesterday, Akimitsu Ashida, chairman of the group representing the country's shipping companies, reportedly confirmed that discussions are taking place.
Speculation has been rife, as far back February, that oil-dependent Asian nations such India and China may resort to sovereign guarantees to lessen the impact of sanctions against Iran oil shipments.
All but 5% of the world's tankers will not be able to carry Iranian oil without losing third-party and environmental liability insurance, as their insurers are impeded by the European Union embargo that takes effect on 1 July.
Under pressure, Japan has significantly reduced the amount of oil it imports from Iran, but has not agreed a blanket boycott.
Japan's ship owners said they will ask the government to help provide insurance if the EU does not "appreciate" the country's efforts to reduce imports from Iran, said Ashida, who is also chairman of Mitsui O.S.K.Lines, the world's largest owner of supertankers.
According to Reuters, Chinese ministers have also held a special meeting on the issue and are determined to ensure that shipments do not drop.
Updating your subscription status
What is the claims environment like in Asia? What are insurers doing to manage increasing claims costs and is there sufficient expertise in the market to handle future claims?
Designing a multinational insurance programme is a complex undertaking. However, the right strategy and tools help optimise performance and boost bottom-line results. This Aon Benfield article addresses the key challenges to overcome, including cultural issues, regulations, business process management and risk.
Country Profiles provides individual summaries for Lloyd's key territories. These profiles contain factsheets on the economy, insurance market and Lloyd's business. This analyst report from September 2012 focuses on Singapore.