Oil-premium proposal

Press, 21 August 1979, Page 9

Oil-premium proposal

NZPA-Reuter Kuwait The chairman of Kuwait’s Chamber of Commerce and Industry has proposed that Gulf States should impose a premium on crude-oil exports to counter a recent declaration by Lloyds, the London insurers, that the Gulf is a war zone. The Lloyds decision to raise insurance on the hulls of vessels plying the Gulf, which took effect last Tuesday, has been criticised as unjustified by Gulf insurance firms.

Mr Abdel-Aziz Saqr, the chamber’s chairman, said in a statement that the proposed increase should be called a premium to cover “risks to threats, rumpurs, and rumourmongers.” Mr Saqr excluded a boycott of Lloyds as a retaliatory measure because it was impractical, the statement said.

Representatives of Gulf insurance and re-insurance

companies are meeting in Bagdad to discuss the Lloyds decision. Insurance officials in Bahrain said they would propose the creation of a Gulf re-insurance underwriters’ market to handle shipping insurance. On July 30, Lloyds declared the Gulf a war zone and announced it would cancel existing insurance policies on the hulls of ships operating in the region. A spokesman said the action was because of prolonged and apparently continuing hostilities in the area. He said new policies with a war-risk premium would have to be taken out.

The Iraq News Agency reported from Bagdad that the Iraqi Chambers of Commerce Federation had sent a cable to Lloyds Condemning the insurer’s action as part of “psychological warfare being waged by imperialist quarters against the region.”