dollars a month in lost revenue. Washington has said it will not allow exports to rise above current sanctioned levels.
SITTING ON THE FENCE
Iran's big oil customers such as India and South Korea, on top of cutting purchases to get waivers from U.S. sanctions, have struggled to import even their permitted volumes, however, because they have been unable to get European insurance cover.
"The U.S. has put a lot of pressure on insurers to do as little as possible with Iran. The biggest problem has been that an increasing number of insurers have U.S. capital, and they are terrified of sanctions," Andrew Bathurst, an independent insurance broker, said.
"Because of the uncertainty, however well the Americans think they have defined it, you will be a very brave CEO if you allow an insurance company to underwrite Iranian business, so insurers will sit on the fence."
Sorting out the legal changes to ease the insurance sanctions will not be easy.
"It's going to be uniquely complicated to lift EU sanctions on the carriage of Iranian crude by reference to limits permitted by the U.S., because the two sets of legislation do not presently cross-refer to each other," Patrick Murphy with law firm Clyde & Co said.
"More likely is some sort of licensing regime where the EU licences the insurance of specific oil shipments where those shipments have effectively been permitted by the U.S," he added.
Government and industry sources said this week that for now Japanese buyers of Iranian crude will keep using specially created Japanese shipping insurance. Sovereign-backed guarantees are seen as a temporary measure, given the possibility of claims that can amount to billions of dollars.
"We have received no information about any change in coverage", in the Japanese government's scheme, said Yasuyuki Nakamura of insurer Japan P&I Club.
On the reinsurance side as well, EU sanctions have blocked European maritime reinsurers, the mainstay of the global market, from any involvement with Iranian oil.
"Until details emerge of exactly which sanctions are being relaxed and of how that relaxation is to be implemented, then reinsurers might well adopt a 'wait and see' approach in relation to the prospects