MUMBAI (Commodity Online): India's crude oil imports from Iran is facing a risk of potential disruption as increasing US and EU sanctions make it impossible for Indian ships to obtain insurance.
The EU ban comes into effect on July 01, 2012 thereby prohibiting European insurers to cover ships that carry Iran's oil. "It shall be prohibited to provide, directly or indirectly, financing or financial assistance, including financial derivatives, as well as insurance and reinsurance, related to the import, purchase, or transport of Iranian crude oil and petroleum products”, An EU legislation says with regard to the ban.
"We are covered by P&I clubs in the EU. These clubs will not be able to give us coverage for vessels to Iran from July. It will be difficult for Indian shipping lines to transport Iranian crude unless alternative arrangements are made”, Reuters quotes Sunil Thapar, director at Shipping Corp of India (SCI) told. SCI is one of the leading shipping lines in India, owning and operating about one-third of Indian tonnage.
With the loss of EU insurers, India may have turn to Japan or China. With Japan reportedly buckling under US pressure and deciding to cut back on Iran imports themselves, India may be left with only China for assistance.
