Refineries Struggle to Find Insurance
Reuters reported from New Delhi today that Indian refiners are set to halt all crude imports from Iran because they might no longer have the insurance coverage to process Iran crude due to sanctions.
“If cover is not available then all Indian refiners will have to halt imports from Iran or else they will have to take a huge risk,” P.P. Upadhya, managing director of Mangalore Refinery and Petrochemicals Ltd (MRPL), told Reuters. “Insurance companies said if I buy Iranian crude my refinery's insurance cover will be cancelled ... If we don't get insurance for the refinery then we will stop buying Iranian crude.” (Reuters, 8 March)
MRPL is India's biggest buyer of Iran crude. India is Iran's second-largest buyer, importing a quarter of its oil exports from Iran worth around $1 billion a month. In the first 10 months of the current fiscal year, India reduced Iran crude imports by nearly 22 percent on the year.
“Iran imports will be stopped soon… As far as insurance is concerned, we are all sailing in the same boat,” an official at Hindustan Petroleum Corp (HPCL), Iran's third-biggest Indian buyer, told Reuters.
It was not immediately clear why the insurance coverage has become the issue now, several months after Europe and the U.S. introduced the related sanctions.
File photo: Iran's oil export terminal at Kharg (Getty Images)