Insurance companies reject Chevron’s $57 million compensation claim for Iran’s oil seizure

Insurance companies reject Chevron’s $57 million compensation claim for Iran’s oil seizure
Insurance companies reject Chevron’s $57 million compensation claim for Iran’s oil seizure

Three insurance companies have rejected Chevron’s claim for compensation over last year’s seizure of an oil shipment by Iran, according to a complaint filed Tuesday in a U.S. court in California.

The tanker Advantage Sweet, chartered by Chevron, was boarded by Iranian military personnel in the Gulf of Oman in April 2023 and its cargo of crude oil was confiscated and then transferred to an Iranian ship.

Zurich American Insurance, Liberty Mutual Insurance and Great American Insurance have asked a U.S. District Court in San Francisco to confirm their dismissal of Chevron’s $57 million claim, including interest on the loss.

The oil seizure was not covered by Chevron’s maritime cargo or war risk insurance policies, the three insurers said in their complaint.

Chevron did not immediately respond to a request for comment.

“The seizure of crude oil and its subsequent expropriation by Iran does not constitute ‘war operations,'” the companies said of their refusal to cover war risks.

The cargo was also not covered by the marine cargo insurance policy because it did not cover seizure or confiscation “whether in time of peace or war and whether lawful or not”, according to the complaint.

Chevron chartered the Advantage Sweet to transport crude oil to Houston from the neutral zone shared between Saudi Arabia and Kuwait, according to the complaint. Chevron has oil production operations in this area.

“Iranian Navy commandos boarded the Advantage Sweet while the vessel was in international waters in the Gulf of Oman, on or about April 27, 2023, and took control of the vessel and its cargo of crude oil,” according to the complaint.

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