UPDATE 2-Lloyd's says won't cover Iran petroleum shipments

* Lloyd's says will always comply with applicable sanctions

* Says its decision recognises importance of U.S. market

(Adds further comment, detail, background)

By Jonathan Saul

LONDON, July 9 (Reuters) - Lloyd's of London will not insure or reinsure petroleum shipments going into Iran, the insurance market said on Friday, in another blow to the Islamic Republic from wide-ranging U.S. sanctions.

U.S. President Barack Obama signed into law last week new sanctions that aim to squeeze Iran's fuel imports and increase its international isolation.

"The U.S. is an important market for Lloyd's and, in recognition of this, the market will not insure or reinsure refined petroleum going into Iran," Lloyd's General Counsel Sean McGovern told Reuters in a statement.

"Lloyd's will always comply with applicable sanctions," McGovern added.