NEW DELHI May 1 Indian state-run insurers have
agreed to give limited cover to local ships for carrying Iranian
oil, helping the energy-hungry country import reduced volumes
from sanctions-hit Tehran from July, a Shipping Corp of India
director said on Tuesday.
"We have in writing from General Insurance Corp that it and
four other insurers will provide a cover of $50 million to
Indian flag carriers per Iranian voyage," Sunil Thapar of
Shipping Corp of India, the country's largest shipping
firm with a fleet of 29 crude carriers, told Reuters.
Tough new European Union sanctions aimed at stopping Iran's
oil trade also ban EU insurers and re-insurers from indemnifying
ships carrying Iranian crude from July.
China, another key oil client of Iran, is considering
sovereign guarantees for its ships to continue importing
The amount of protection and indemnity (P&I) cover on offer
from Indian firms is just a fraction of any liability that may
arise needing third-party P&I cover, but still higher than
Japan's offer of just $8 million cover.
Thapar said with the new insurance facility the Indian fleet
should be able to meet demand from the oil industry. India has
reduced Iranian oil imports by about a quarter in 2012/13
Iran, OPEC's second-largest producer, exports most of its
2.2 million barrels of oil per day to top Asian buyers China,
India, Japan and South Korea.
In fiscal year 2011/12, New Delhi imported less than 340,000
bpd oil from Tehran against a contracted 362,000 bpd, and is now
buying 280,000 bpd.
Thapar said General Insurance Corp of India will be the
re-insurer and the cover will be extended by any of the four
firms - United India Insurance, New India Assurance Co. Ltd.,
National Insurance Co. Ltd. and The Oriental Insurance Co. Ltd.
Shipping Corp, Great Eastern Shipping Co Ltd,
India Steamship and Mercator Lines are among the
companies that stand to benefit if they take the cover.
He said it would take some time for the new facility to be
available because the insurance regulator's approval was needed.
"This will be an exposure to their balance sheets."
Indian shipping firms will continue to transport Iranian
crude even if limited insurance coverage due to tightening
Western sanctions leaves them financially exposed to a spill or
accident, a top executive and industry sources said last month.
(Reporting by Nidhi Verma; Editing by John Chalmers)