NEW DELHI, India (NNN-Bernama) -- With European sanctions likely to cripple shipping of Iranian oil from next month, India is seeking to use shipping lines of the Islamic nation to transport oil.
India has up to now obtained oil from its third largest supplier through ships owned by domestic firms. Ships and oil are being insured by European reinsurers.
But domestic shippers may not be able to transport the oil when European Union sanctions against Iran come into effect in July as they will not have insurance cover, Press Trust of India reported yesterday.
Oil Ministry has proposed that Iran ship the crude oil in their own ships, practically absolving the importer of the liability to get insurance cover for the carrier and the oil.
"We have asked the Shipping Ministry to allow Iranian ships to transport oil," Oil Secretary G C Chaturvedi told reporters.
The ministry is also seeking intervention of the finance ministry to get state-owned General Insurance Corp (GIC) to provide insurance cover to domestic ships carrying oil from Iran.
"We are currently receiving supplies from Iran," he said.
He said that American insurance companies could be tapped too as Washington has this month exempted India from Iran-related financial sanctions in exchange for significant cuts in Indian purchases of Iranian oil.
Sovereign guarantee to cover for loss of ship or loss of oil cargo may be extended to shippers as the last resort in case all options fail.
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