| NEW DELHI
NEW DELHI Feb 13 India will ensure its refiners
have insurance for plants that run crude from Iran, a government
source said on Wednesday, allaying fears that imports from the
sanctions-hit country may have to be halted.
State-run refiner Hindustan Petroleum Corp said on
Tuesday it might not be able to use Iranian crude at its plants
from June if insurers refused to renew contracts on its plants
because of western sanctions.
India, one of Tehran's biggest clients and heavily reliant
on oil imports, has already had to organise emergency cover for
ships carrying Iranian crude after sanctions made it difficult
for domestic insurers to secure reinsurance.
"As long as it is for Indian consumption, why shouldn't we?"
said the source, when asked if India would arrange insurance for
refineries that process Iranian crude.
"Oil is as basic as food. Just as you need food, you need
oil," added the source, who declined to be named because of the
sensitivity of the matter.
The source did not give details, however, on how the
insurance would be arranged or how much cover would be offered.
The sanctions, which target Iran's oil revenues and
financing, have blocked European and U.S. companies from deals
with Tehran in virtually every non-essential sphere, including
Although Indian insurers do not fall directly under the
sanctions, they depend on the Western reinsurance market to
hedge their risk.
India's emergency insurance for ships, however, totals only
a fraction of the $1 billion coverage that a supertanker would
typically get from reinsurers against pollution and personal
injury claims, and only one ship has so far used it for
deliveries from Iran.
HPCL is Iran's third-largest Indian client and has lifted
about 46,000 barrels per day (bpd) in the current contract year
that ends on March 31.
Indian insurers have told fellow state-run refiner MRPL
that they will fully cover its facility to handle
larger crude vessels only if it gives an undertaking not to use
the single point mooring for vessels carrying Iranian crude.
MRPL is Iran's biggest client in India alongside privately
owned Essar. While state-run refiners sell all their
petroleum products on the domestic market, Essar exports some of
The source did not clarify whether Essar's facilities would
be covered by any emergency insurance.
An Essar spokesman declined to comment.
(Editing by Jo Winterbottom and Jane Baird)