Iranian crude to India remains unaffected despite sanctions
Shipment of Iranian crude to India would remain unaffected even after stricter American and European Union sanctions that prevent its insurers to cover oil tankers with Iranian oil, Press TV reported.
Indian companies operating these oil tankers from Iran have decided to continue their operations despite a higher risk posed by the reduced insurance cover.
In July last year, the stricter sanctions imposed by the European Union against Iran prevent its big insurance and reinsurance companies from covering oil shipments from Iran.
About 90 percent of all oil shipping insurance is based in the western countries, which could also affect transportation of Iranian oil to China, Japan and South Korea.
To get around the problem the Indian oil shipping companies have sought the help from the local state-owned insurance companies. Indian refineries are modified to especially process crude oil coming from Iran.
Knowing well that at best the Indian insurers can provide only a partial cover for their tankers, Shipping Corp. of India, Great Eastern and other companies have sought only US$ 50 million of insurance cover for each trip in third-party liability.
According to industry experts in case of a major oil spill, the liability of oil companies could run in billions of US dollars.
However the Indian shipping companies could take comfort from the fact that during last decade there has not been any major accident involving the oil tankers coming from Iran.
Every month India imports 2.2 million barrels of oil from Iran, and remains one of the largest importers from that country.
Observers say that with Indian shipping companies willing to take the risk regarding insurance for it's oil tankers , India's oil supplies from Iran will not be disrupted and will also not lead to a rise in prices of most of its domestic petroleum products.
Edited by: S. Isayev