Sanctions and Insurance Rules Make Proposed Hormuz Passage Deal Unworkable

Four shipping industry sources said a proposed Iran-Oman arrangement giving Tehran control over ships entering the Gulf through the Strait of Hormuz is not easily workable under U.S. sanctions and insurance terms. A Lloyd's Market Association clause introduced in late July ends war risk cover for any vessel that pays a Hormuz transit fee, stating insurers have no liability to indemnify such a payment. Iran is seeking 5 to 7 percent of cargo value, Oman is discussing about 3 percent, and Washington opposes any charge. The U.S. Treasury has sanctioned the Persian Gulf Strait Authority, which Iran created in May to operate the waterway.