Insurers from Iran have offered to provide cover for tankers transporting that country’s crude.
The latest in the insurance news saga regarding Iranian oil tanker coverage, particularly when it is headed to India, is that Iran is offering to provide the coverage for the ships so that Indian companies will be able to accept it.
However, the Indian companies still hold some reluctance as they do not want to expose themselves to sanctions.
India has been considering adding an additional state guarantee of $327 million to this insurance news, to help to support local coverage for refineries that process crude from Iran and are therefore not able to obtain foreign protection as a result of the sanctions from the West. This, according to a source within the industry in that country.
Previous insurance news had shown that the government had ruled out that form of guarantee.
However, the plummeting currency in India has brought it to record lows, so the country is eager to help to make insurance news headlines once more by replenishing its oil imports from Iran, which has agreed to receive its payments in rupees, as it is growing more expensive for India to purchase their oil imports when they are priced in dollars.
The finance ministry has also looked back into the insurance news that involved covering part of a planned fund (totaling Rs40 billion) in order to underwrite this coverage, to which local insurers and the oil industry will each be contributing Rs10 billion. The finance ministry has come to the decision to look into a “facility/sovereign guarantee” of Rs20 billion at a meeting that the financial services secretary chaired on the last day of last month.
At the moment, finance ministry spokespersons are declining to comment on this insurance news. At the same time, however, there are two refiners that are state run in India and which have had to cease all of their imports of Iranian crude since April as a result of coverage issues for those refineries. As a result, the imports from Iran were slashed by more than half in June, this year, when compared to last year.