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Source: Reuters

May 8, 2024

Insurance firms deny Chevron's $57 million claim for Iran oil seizure

By Reuters

HOUSTON, May 8 (Reuters) - Three insurance companies have rejected Chevron's (CVX.N), opens new tab claim over the seizure last year of an oil cargo by Iran, according to a complaint filed on Tuesday in a U.S. court in California.

The Chevron-chartered tanker Advantage Sweet was boarded by Iranian military, opens new tab in the Gulf of Oman in April 2023 and its crude oil cargo confiscated and later transferred to an Iranian vessel.

Zurich American Insurance, Liberty Mutual Insurance and Great American Insurance asked a U.S. District Court in San Francisco to uphold their rejection of Chevron's $57 million claim that includes interest on the loss.

The oil seizure was not covered under either Chevron's marine cargo or war risks policies, the trio said in their complaint.

Chevron did not immediately reply to a request for comment.

"The seizure of the crude oil and its later expropriation by Iran do not constitute 'warlike operations,'" the companies said of their denial of war risks coverage.

The cargo also was not covered under marine cargo policy because that policy did not cover a seizure or confiscation "whether in time of peace or war and whether lawful or otherwise," the complaint said.

Chevron chartered the Advantage Sweet to transport crude oil to Houston from the Neutral Zone area shared by Saudi Arabia and Kuwait, the complaint said. Chevron has oil production operations in the zone.

"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 seized control of the vessel and its cargo of crude oil," according to the complaint.

Reporting by Gary McWilliams; Editing by Chizu Nomiyama

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