In an effort to boost the sales of crude, Tehran is now offering coverage to Indian refineries.
Iran has just offered to provide Indian refiners with oil insurance in order to try to increase its sales of crude, as Tehran seeks out new ways to reduce the considerable impact it has suffered from the revenues drop that resulted by strict sanctions from the European Union and the United States.
The sanctions from the E.U. and the U.S. have slashed away at Iran’s ability to sell crude.
These sanctions were specifically geared toward reducing the income that the country could generate through crude sales in order to apply pressure to Iran to reduce or halt its controversial nuclear program. The elimination of oil insurance and reinsurance from those region cut the 2012 exports in half, which reduced income by as much as $5 billion per month.
The oil insurance sanctions have made it hard for the country’s top buyers to continue to import.
India, for example, the second largest buyer of crude from Iran, has been forced to decrease its imports because the Indian oil insurance companies have stated that they are no longer capable of covering refineries that process crude from Iran. Now, Tehran has stepped up and said that they will be able to provide their own coverage to those refiners. This, according to a source who spoke following a meeting between Indian Oil Minister Veerappa Moily and his equivalent from Iran, Rostam Qasemi.
Qasemi briefly spoke to reporters about the oil insurance meeting with Moily and said that “We had a fruitful meeting…Our meetings are about the energy sector.” He did not add any additional details. Qasemi was visiting India for three days in an effort to try to encourage the country to increase its imports of Iranian crude and to invest in its oil and gas sector.
Two major refineries in India ceased their purchases of Iranian crude in April due to the oil insurance issues in the country. Hindustan Petroleum Corp. and Mangalore Refinery and Petrochemicals Ltd. made a considerable dent in the imports of the crude. India’s imports had already reduced by 26.5 percent by the end of March, but by the end of April, that figure rose to 56.5 percent.