Reuters: Damaged Tanker in Singapore Cannot Claim Insurance Due to Oil Connection with the Islamic Republic

Tracking organizations for shipping activities and industrial sources say the recent collision of two tankers in Singapore waters creates issues for claiming damages from the insurance company, as one of the vessels has previously carried oil from the Islamic Republic of Iran. The 'Hafnia Nile', flagged in Singapore, and 'Ceres One', flagged in São Tomé and Príncipe (an island in West Africa), collided on Friday, July 19, about 55 kilometers northeast of Pedra Branca Island in Singapore, resulting in a fire. According to the Malaysian Maritime Administration, no signs of a major oil spill have been observed in the area. As a result of the collision, the Hafnia tanker sustained significant damage to its hull and engine and must be towed to a nearby port. The Ceres One was empty at the time of the accident, but available data indicates that it has previously transported Iranian crude oil. Clare Jangman, a senior official at the 'United Against a Nuclear Iran' organization, states that this ship last loaded Iranian oil from an Iranian tanker outside the Kharg terminal in April. She further adds that this oil cargo was transferred to two other tankers around the Strait of Malacca a few days later and arrived in China on Wednesday, April 12. According to Clare Jangman, Ceres One has transported Iranian crude oil at least four times in recent years, totaling approximately eight million barrels. She also mentioned that the ship has moved about 7.5 million barrels of Venezuelan crude oil at least four times. Reuters reports that the owner of this ship, residing in China, was unavailable for comment on this claim. According to tanker trackers and trade sources, China, which is the largest buyer of Iranian crude oil, claims to oppose unilateral sanctions. However, Chinese buyers present oil received from the Islamic Republic as imported from other countries such as Malaysia, Oman, or the United Arab Emirates. China has not reported any oil imports from Iran for about two years. Insurance experts believe that the recent incident is the first case of a collision involving tankers known as the 'shadow fleet', which carry oil cargoes that include Western sanctions. Although Ceres One and its owner are not sanctioned, transferring oil cargoes that are under sanctions is considered a violation of insurance laws and may void compensation payments. Jonathan Mass, a transportation manager at a legal firm and insurance claims expert, states that this is a unique incident, and if it is proven that Ceres One was carrying Iranian oil or had previously transported Iranian oil, insurers may refuse to pay damages. He adds that if it is proven that Iranian oil was being transported, insurers must inform authorities of the sanctions violation, which could also lead to further complications for the ship and its owner. Tankers typically have protection and indemnity insurance that covers third-party liability claims, including damage and environmental harm. They also have separate coverage for hull and machinery, which includes damages to the ship. The Hafnia tanker is fully covered by a reputable Norwegian insurance company, while Ceres One is covered by a small international insurance company and a Chinese insurance company.