Tehran’s efforts to overcome the returning U.S. sanctions include providing their own insurance coverage.
Iran has started offering India oil shipment insurance to cover tankers operated by Iranian companies. The goal is to overcome the barriers occurring as a result of Indian insurance companies backing out of covering Iranian oil takers due to the return of sanctions from the United States.
By providing their own cargo insurance for tankers headed to India, Tehran is hoping to keep tankers moving.
As India is Iran’s second largest single oil customer – China being the largest – Iran is hoping to continue to sell its oil to the country. Many Indian insurance companies have decided to withdraw their oil shipment insurance coverage for tankers from Iran. Their concern is that they will conflict with U.S. sanctions. Should that happen, Indian refiners run the risk of having their U.S. financial system access cut off.
Tehran is hoping that even without insurance based in India, the refiners will continue their imports of Iranian oil provided that the insurance is available elsewhere. United India Insurance has already ceased its oil insurance cover for crude tankers from Iran, according to a Reuters source.
If Indian refiners don’t accept the Iranian oil shipment insurance, the outcome will be costly for Tehran.
National Iranian Tanker Company (NITC) crude oil cargo tankers are already en route from Iran to India, according to the Reuters report. The shipments are on their way even as Indian and western oil insurance companies, alike, have stopped selling coverage for oil cargo out of Iran.
The two largest refiners in India, Bharat Petroleum Corp and Indian Oil Corp (IOC) have begun purchasing Iranian oil shipped in tankers owned by Iranian companies and that have been insured out of that country as well. It appears that, at least for now, Tehran’s efforts to keep the shipments on the move are at least somewhat successful, said the report.
Earlier last week, reports indicated that the third largest Indian refiner, Hindustan Petroleum, had ceased its own Iranian crude oil shipment after that refiner’s insurance company backed out of covering the Iranian cargo. It cited concerns regarding United States sanctions for stopping the oil shipment insurance.