Indian refiners that are running Iranian oil will be able to cover themselves through the government.
The Indian government made insurance news on Wednesday that refiners will be able to find coverage for plants that are running crude that was sourced in Iran, helping to assuage some of the concerns that imports made from that Middle Eastern country would need to cease.
The worry has been based on the sanctions that have been applied to coverage of Iran’s crude.
Hindustan Petroleum Corp, a refiner run by the state in India, made an insurance news announcement on Tuesday that it may not be able to continue to use crude from Iran beyond June if insurers were not willing to provide coverage for those plants due to sanctions that have been implemented in the West, such as throughout the European Union and the United States.
This is vital insurance news to Iran, as India is one of its largest clients.
India is highly dependent on being able to import oil from Iran and this insurance news isn’t the first time that the country has had to scramble to create emergency coverage for the tankers carrying that crude once Western sanctions eliminated the existing protection that had been in place. The removal of coverage from the E.U. made it very challenging for India to be able to secure domestic coverage due to a lack of reinsurance.
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Due to the sensitive nature of this insurance news, the source of this announcement declined to be identified. The individual was asked if India would be arranging for the coverage of refineries that would be processing crude from Iran and replied that “As long as it is for Indian consumption, why shouldn’t we?”, adding that “Oil is as basic as food. Just as you need food, you need oil.”
Equally, this insurance news source did not provide the specific details regarding how the coverage would be provided and how much protection it would be offering. The sanctions that are currently in place from the European Union and the United States stop companies from those regions from being able to provide coverage for virtually every non-essential industry in Iran, including insurance protection.