Iran insures crude shipments to India

Iran has offered sovereign guarantees for tankers shipping its crude oil to India as the OPEC state moves to further its support for crude exports to the South Asian country.

The offer made to India by Iran’s Ministry of Industries, Mines and Trade covers liabilities between USD 50 million and USD 1 billion per incident through sovereign guarantee and the government special fund.

However, for the shipping liability of less than USD 50 million, an Iranian consortium led by the Central Insurance of Iran will provide that coverage.

The offered guarantee is to compensate for the lack of insurance coverage for these shipments.

Under pressure from the US and its Europeans allies, Western insurance companies decline to insure tankers carrying Iranian crude.

The illegal sanctions against Iran have targeted the country’s lucrative energy sector, with India.

The Indian government, however, is likely to play a supportive role as oil imports from Iran are crucial for India’s energy security.

India, the second largest importer of its crude oil after China, has been forced to import oil from Latin American countries over the past six months to meet its shortfall.

Analysts are positive that Iran’s offered assurances for its crude oil tankers will allay India’s concerns on the issue of insurance.