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India has decided to extend by six months the special permission granted to ships with Iranian insurance to call at the country’s ports, a government official said.
This will enable New Delhi to get continued supply of oil from Iran, albeit reduced volume, despite the US sanctions against the West-Asian nation.
The six-month extension given to Iranian ships in January expires this Friday and New Delhi’s decision assumes significance particularly in the context of the trouble in Iraq, the second largest source of crude supply to India now.
Normally, ships without insurance from Intentional Group of P&I Clubs are not allowed to call at Indian ports. This is because in the event of any mishap, there is no guarantee that the claims will be settled by the ship’s owner.
India granted special permission to vessels with Iranian insurance after European insurers imposed ban on Iranian voyages, following the US and EU sanctions. Indian ships or other flag carriers cannot carry Iranian cargo as international P&I insurers stopped cover to vessels carrying such cargo since 2012 following the US sanction against Tehran over its nuclear programme.
Though, the US has relaxed sanctions against Iran, the Europe-based Intentional group of P&I Clubs are yet to take a decision on granting cover to Iranian voyages.
As recommended by the committee constituted by the government, vessels insured by two Iranian P& I Clubs — Kish and QITA — are allowed to enter Indian waters, the official said.
Earlier, India reportedly insisted on Iran providing financial guarantee for granting extension. However, following the request made by Tehran, which was India’s second largest exporter of crude till 2011, New Delhi agreed to grant permission on Iran’s sovereign guarantee.
After the insurance ban, India has been cutting its purchase of oil from Iran. India’s import dropped to 11 million tonnes last fiscal from 18 million tonnes a couple of years ago.
Essar Oil and the public sector Mangalore Refineries and Petrochemicals Ltd are the major Indian importers of Iranian crude.
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