Iran oil shipping to resume as insurers step in

Iran oil shipping to resume as insurers step in

India, the third-biggest buyer of Iranian oil, will offer state-backed insurance to tankers, helping the nation's biggest sea carrier to resume cargoes from the Persian Gulf nation hit by international trade sanctions, Bloomberg reported.

Shipping Corp. of India will soon start services to Iran as Indian insurers have agreed to give as much as $100 million of cover per voyage, Chairman Sabyasachi Hajara said without specifying a timeframe.

"Prior to the sanctions, European companies provided unlimited protection against risks including oil spills and collisions," he said.

The resumption of services will help Mangalore Refinery & Petrochemicals Ltd. (MRPL), India's biggest buyer of Iranian crude, and other state processors secure supplies after European Union measures disrupted trade.

The sanctions, prompted by Iran's nuclear plans, also affect shipments to China, Japan and South Korea as 95 percent of oil tankers are insured by the 13 members of London-based International Group of P&I Clubs.

"As far as India is concerned, we are bothered about our sovereign requirements," Hajara said in a July 31 interview at the company's Mumbai headquarters. "We took a pragmatic view."

Mangalore Refinery halted purchases from Iran after the sanctions made it impossible to get ships to carry the crude, Managing Director P.P. Upadhya said last week. That prompted the company to buy more of its requirements from the spot market where prices are typically higher.

Iran was the fourth-biggest supplier of crude to the South Asian nation in the year ended in March, according to the Associated Chambers of Commerce and Industry of India. The country purchased about 18 million tons of Iranian oil, the New Delhi-based lobby group said on May 8.

"Being a sovereign entity, Shipping Corp. has to follow certain directions in the larger interest of the nation," said Chetan Kapoor, a Mumbai-based analyst with IDBI Capital Market Services Ltd. "They don't have much of an option."

The EU ban on the purchase and insurance of Iranian oil targets the nation's disputed nuclear program that the U.S. and its allies say is a cover for developing atomic weapons. Iran has said the program is for civilian energy and medical research.

In June, Japan's parliament passed a bill to provide $7.6 billion of sovereign insurance to tanker owners that carry Iranian oil. Importers in China and South Korea are also seeking alternative covers or have relied on Iran's fleet after International Group members, who follow EU law, stopped covering shipments.

Indian refiners will buy 11 percent less crude from Iran this year, junior oil minister R.P.N. Singh said in May, after U.S. Secretary of State Hillary Clinton urged the country to cut purchases. A month later, the U.S. exempted India from its financial sanctions on oil imports from the Islamic Republic.

Indian government officials including Foreign Secretary Ranjan Mathai and Oil Minister Jaipal Reddy have said the country will follow sanctions imposed only by the United Nations and isn't bound by the U.S. and EU measures against Iran.

Hajara said insurers including United India Insurance Co. and General Insurance Corp. of India are offering a lower cover for Iranian shipments compared with their European counterparts because the sanctions blocked their access to reinsurance.

"The Indian insurers are offering $50 million of hull and machinery cover and $50 million of protection and indemnity per voyage", he said.

Shipping Corp. is going ahead with the plan as its studies have shown that carriers in the Iran-India route haven't sought any claims from insurance companies in the past 10 years, he said. Still, potential liabilities may run into "billions of dollars," Hajara said.

IDBI Capital's Kapoor said the Indian government may bail out Shipping Corp. should the company face any claims stemming from accidents.

"As a sovereign entity, if ever they face any liquidity issue, they are likely to be covered by the government," he said. "I don't see the size of the cover as a worry."

Edited by: S. Isayev

Despite events in Armenia, it's necessary to continue implementation of agreements on Nagorno-Karabakh -  Russian official
Despite events in Armenia, it's necessary to continue implementation of agreements on Nagorno-Karabakh - Russian official
Supplies of 'Iskander' missiles to Armenia must be stopped – Russian expert
Supplies of 'Iskander' missiles to Armenia must be stopped – Russian expert
Military coup attempt in Armenia - PM inviting supporters to Republic Square
Military coup attempt in Armenia - PM inviting supporters to Republic Square
Loading Bars
Australia receives AstraZeneca vials as it ramps up vaccination drive
January 2021 value of mortgage loans in Azerbaijan grows in absolute terms
Kazakhstan adds 791 new COVID-19 cases
5.5-magnitude quake hits 81 km SW of Islay (Matarani), Peru
Iranian Minister unveils ports' infrastructure dev't plans
Turkey confirms 9,193 new COVID-19 cases, 2,693,164 in total
S&P Global affirms Georgia’s sovereign credit rating at ‘BB’
Razi COVID-19 vaccine to begin clinical trial: Minister
5 died after accident in northeast China chemical fiber plant
US regulator approves Johnson&Johnson coronavirus vaccine
Kazakhstan twofold decreases exports to Norway amid COVID-19
Iraq reports 3,543 new COVID-19 cases, 692,241 in total
5.3-magnitude quake hits 3 km SW of Point MacKenzie, Alaska
Qatar reports 460 new COVID-19 cases, 163,197 in total
Weekly review of highlights in Azerbaijani financial market
UK records another 7,434 coronavirus cases, 290 deaths
It is necessary to end deployment of Armenian armed forces on territory of Azerbaijan - Foreign Ministry
WHO reports over 420,000 new daily cases of COVID-19
Istanbul’s major Galataport project to go live in April
0.03% of pupils and 0.1% of school staff in Georgia confirmed with Covid-19 this week
Iran's Energy Exchange announces products to be on sale on February 28
Uzbekistan's largest share in formation of GDP falls on Tashkent
Azerbaijan's revenues from tea, coffee exports double in Jan.2021
Cargo movements in Iran's Khalij-e-Fars port increase
China conditionally approves one-shot recombinant COVID-19 vaccine
Stock gains power Buffett's Berkshire Hathaway to higher profit
More than 165,000 apply for Turkey’s most popular scholarship
Georgian Railway resumes passenger transfers
Kazakhstan reports value increase in all types of deposits
New road put into operation in Iran's Golestan Province
Azerbaijan sets up working subgroups to prepare 2021-2025 Development Strategy
Bahar Azadi gold coin price falling in Iran
Azerbaijan reports 172 more COVID-19 recoveries
Azerbaijan's Ministry of Finance to put up medium-term bonds for auction
Azerbaijan's banking sector ends January 2021 with profit
Foundation of several manufacturing enterprises laid in Iran's Qazvin Province
Uzbek-Korean JV to buy spare parts for metal detector via tender
USAID to promote start-up dev’t in Turkmenistan
President Aliyev: Any attempt to violate implementation of November 10th declaration will be very harmful for Armenia (VIDEO)
Iran reveals COVID-19 data for February 27
Bosnian TV channel visits liberated Azerbaijani Aghdam, reminds of Khojaly genocide
Azerbaijani police officers find ordnances left by Armenians in Khojavand (PHOTO)
Long-term energy demand impact of COVID-19 is modest
President Aliyev to Iranian reporter: Your question is a kind of an accusation (VIDEO)
New Zealand's largest city Auckland back to lockdown after COVID-19 case
Iran pins hopes on Swiss financial channel to purchase COVID-19 vaccines
Foreign journalists visit village where two-year-old Azerbaijani girl was killed by Armenians
Volume of cargo loaded, unloaded in Iran’s Chabahar port revealed
Weekly review of Azerbaijan's oil and gas sector
Eni Turkmenistan Ltd opens tender for catering, housekeeping services
Kazakhstan boosts imports of Switzerland-made products
Uzbek ministry, German Society for International Cooperation sign agreement
Uzbekistan, China expand mutual trade despite COVID-19
Georgia reports 373 new cases of coronavirus on Feb.27
Buy/sell operations at Iran Mercantile Exchange soar
Weekly review of Azerbaijani precious metals market
Baku Metro continues preparatory work for commissioning of new 'November' 8 station
Iran's exports to Russia increase
Uzbek-Korean JV to buy spare parts for pumps via tender
Kazakh airlines eye to launch several flights on Turkestan-Istanbul route
UNDP in Turkmenistan opens tender for services on seismic work
Volume of electricity generated by renewable energy power plants in Iran announced
Researcher talks monuments on ancient Azerbaijani lands vandalized by Armenians (PHOTO)
Uzbekistan reveals COVID-19 data for Feb. 27
Azerbaijan's MoD shares footage from Gubadly's Afandilar village (PHOTO/VIDEO)
Iranian currency rates for February 27
Remittances from Azerbaijan to Georgia show highest growth rate
Belarus considering possibility of supplying agricultural machinery to Turkmenistan
Turkmenistan’s Turkmenbashi Oil Refinery exceeds plan for kerosene production
Azerbaijani oil prices published
Kazakhstan's uranium mining company opens tender to acquire electro-technical materials
Issuance of construction permissions in Georgia down
Philippines extends partial coronavirus curbs in capital until end-March
Weekly review of Azerbaijani currency market
Kazakh gas supply company to attract equipment installation services via tender
Turkey's tourism industry puts hopes on safety measures for new season
Azerbaijani marketing platform plans to become regional player
Argentine health minister tests positive for COVID-19
Czech gov't declares new state of emergency over coronavirus
U.S. FDA advisors recommend approving Johnson & Johnson COVID-19 vaccine for emergency use
Increase in malware attacks makes cybersecurity more relevant than ever - Kaspersky Lab in Azerbaijan
South Korea vaccinates 18,000 to start ambitious COVID-19 campaign
US may announce new sanctions on Russia within weeks - White House press secretary
Founder of Indian Jet Airways eyes opening airline in Uzbekistan’s Namangan region
Saudi Arabia rejects U.S. intelligence report on Khashoggi's killing: statement
Israel registers 2,738 new COVID-19 cases, 769,971 in total
U.S. announces 'Khashoggi ban' for 76 Saudi individuals
Number of COVID-2019 cases across globe up by over 427,000 in past day
Slovenia confirms first case of coronavirus variant identified in S. Africa
UN Security Council adopts resolution on vaccination
UK records another 8,523 coronavirus cases, 345 deaths
Kazakhstan shows interest in supplies of Belarusian sugar, its manufacturing technology
Turkey reports 9,205 new COVID-19 cases, 2,683,971 in total
Iran, Russia emphasize need to coop. in agricultural sector
When will Georgia receive its first doses of the COVID-19 vaccine?
House poised to approve Biden's $1.9T coronavirus relief bill in Friday vote
Canada approves use of AstraZeneca COVID-19 vaccine
Azerbaijan discloses volume of liabilities of banks in Jan. 2021 accounting for deposits
Azerbaijan imposes restrictions on import of poultry meat from Estonian county
Amount of financial support of Kazakh manufacturing sector by Baiterek holding increases
All news