Chevron Reaches $52M Settlement Over Seized Oil
A high-profile insurance dispute between Chevron and three insurers over $52 million in seized crude oil has finally come to an end. The disagreement centered on whether the seizure of the oil by the Iranian military fell under marine cargo and war risk policies, which Zurich American Insurance Co., Liberty Mutual Insurance Co., and Great American Insurance Co. had issued to Chevron.
The insurers initially argued that they should not have covered the loss because the U.S. and Iran were not technically at war when the incident occurred. They pushed for summary judgment in April 2024, framing the issue as a confiscation of the oil itself rather than the seizure of the vessel carrying it.
The Advantage Sweet, which was chartered by Chevron to haul 735,000 barrels of crude oil from Kuwait to Houston, was boarded by Iran's Navy while passing through the Gulf of Oman in 2023. The vessel remained in Iranian custody until March 2024, when a court order permitted the transfer of the oil onto an Iranian vessel.
After Chevron filed a formal claim seeking nearly $52 million from its primary insurers, the companies denied coverage and turned around to sue Chevron directly. Chevron countered with claims of its own, alleging breach of contract and bad faith against both its primary and excess insurers.