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India renews approval for accepting ships with Iranian cover by six months

Following the 2012 ban, the National Iranian Tanker Co.’s tankers have been deployed to deliver crude to Tehran’s customers in India, while exports of non-oil commodities and industrial goods use the vessels of Iran’s Hafiz Darya Shipping Lines and Safiran Payam Darya Shipping Lines. Photo: AFPPremium
Following the 2012 ban, the National Iranian Tanker Co.’s tankers have been deployed to deliver crude to Tehran’s customers in India, while exports of non-oil commodities and industrial goods use the vessels of Iran’s Hafiz Darya Shipping Lines and Safiran Payam Darya Shipping Lines. Photo: AFP

The decision could help India buy more crude oil from Iran if the conflict in Iraq spreads, begins to hurt oil supplies

Bangalore: India has extended approval by six months beginning 28 June for two Iranian ship underwriters to provide insurance for container, tanker and bulk vessels calling at Indian ports.

A six-month approval by India for Iran’s Kish P&I Club and Moallem Insurance Co. to cover Iranian ships calling at local ports will end on 27 June. The approval is applicable to Kish P&I Club and Qita P&I Club, which has replaced Moellem Insurance Co., a spokesman for the shipping ministry in Delhi said.

Protection and Indemnity (P&I) Clubs provide insurance cover for broad, indeterminate risks such as third-party liabilities, which include a carrier’s liability to the owner of a cargo for damage to the cargo, the liability of a ship after a collision and environmental pollution.

An Indian government committee headed by the director general of shipping, which clears such extensions, also agreed to Iran’s request for more discussion on India’s demand for a 2,300 crore bank guarantee in rupees as a precondition for allowing Iranian ships with Iranian insurance cover to enter Indian ports. The guarantee was to cover any potential liability in the event of maritime accidents in Indian waters.

“The guarantee issue is still being discussed," the ministry spokesman said. “The two Iranian underwriters have stated they have the backing of the sovereign government. We have no reason to doubt that they will not shoulder their responsibility for clean-up operations in the event of a mishap."

“Considering all this, we decided to renew the approval granted to the two Iranian ship underwriters by another six months each," the spokesman said.

The decision could help India buy more crude oil from Iran if the conflict in Iraq spreads to the southern part of the country where the oilfields are located and begins to hurt supplies. Iraq overtook Iran as India’s second-biggest crude supplier after Western insurers stopped covering ships hauling crude from Iran as part of sanctions against the Persian Gulf nation’s controversial nuclear programme.

India, the world’s fourth-biggest oil importer, has struggled to get tankers and insurance for transporting oil from Iran after the US and the European Union imposed these sanctions from July 2012.

The sanctions targeting Iran’s disputed nuclear programme have meant insurers based in Europe—who account for the majority of cover for the tanker market—cannot insure Iranian oil and other shipments, leading to the emergence of new, untested insurance providers such as Kish and Qita.

The Gulf nation on 24 November 2013 signed an accord with world powers, agreeing to curtail its nuclear activities in exchange for as much as $7 billion in relief from sanctions.

The partial and temporary easing of sanctions against Iran in November by the US and the EU includes the revoking of the shipping insurance ban. The six-month relaxation began on 20 January.

The decision enabled tankers to undertake transportation of oil and petroleum products from Iran.

However, sanction suspension agreed does not permit the chartering of vessels to the National Iranian Tanker Co., companies linked to Iran’s Revolutionary Guard, or other Iranian designated persons or entities, making the relaxation largely ineffective. Indian tanker owners have stayed away from hauling Iranian crude to India even after the temporary easing of sanctions, a shipping industry executive said, requesting anonymity.

Following the 2012 ban, the National Iranian Tanker Co.’s tankers have been deployed to deliver crude to Tehran’s customers in India, while exports of non-oil commodities and industrial goods use the vessels of Iran’s Hafiz Darya Shipping Lines and Safiran Payam Darya Shipping Lines.

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