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

American Financial

08/05/2024 23:24

(Adds Chevron reply in paragraph 5-6)
       HOUSTON, May 8 (Reuters) - Three insurance companies
have rejected Chevron's  CVX.N  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 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 under both marine cargo and war risks policies the company
held.
    "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. Chevron's marine cargo
policy also did not cover a seizure or confiscation, they told
the court. 
    A Chevron spokesperson said the company contests the denial
of insurance coverage. 
        "The military seizure by the Islamic Republic of Iran of
the Advantage Sweet in international waters with Chevron's cargo
aboard was a hostile act plainly covered by our insurance
policies. We look forward to proving this in court," said
Chevron spokesperson Christine Dobbyn.  
    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 and
Diane Craft)
 ((Gary.McWilliams@thomsonreuters.com; +1 469-691-7668;))