BRUSSELS, March 24: The European Union will allow some insurance on Iranian oil shipments before its full embargo starts on July 1, member states agreed on Thursday, responding to concerns from Asian importers heavily reliant on the EU for their cover.    

The decision, expected to be formally approved by EU foreign ministers on Friday, should make it easier for the likes of Japan and South Korea to import Iranian crude at least until the deadline, EU diplomats said.

Those countries lobbied the EU for an exemption on insurance restrictions after the bloc agreed an oil embargo in January as part of efforts to pressure Iran to curb nuclear work many western states fear is aimed at making atomic bombs.

As well as stopping EU states from importing Iranian crude, the embargo banned European companies from transporting, purchasing

or insuring crude and fuel originating in Iran and intended for anywhere in the world.

Thursday’s deal will allow buyers outside the EU to purchase third-party and environmental insurance on their shipments from European insurers, who cover most of the world’s tanker fleet.

“Certain insurance is allowed until July 1,” an EU diplomat said.

The decision will be reviewed before an EU foreign ministers meeting on May 14, where they could, in theory, agree a further extension of the exemption, but consensus would be hard to reach because of divisions among the EU’s 27 states on the issue.

“The decision today is clear, the exemption is allowed until July 1. So unless there is another decision, there will be no more exemptions,” the diplomat said.

Under the embargo, EU governments with existing contracts to import crude from Iran can continue with them until July 1.

Insurance on such purchases is allowed, new contracts are not.—Reuters