TEHRAN (FNA)- India offered sovereign guarantees for oil refineries importing oil from Iran as the Islamic Republic has increased its oil exports to the South Asian country.
India’s Finance Ministry has decided to consider the ‘facility/sovereign guarantee’ for the South Asian country’s refineries importing crude oil from Iran.
Iran also previously offered to provide sovereign guarantees of its own for oil tankers shipping its crude oil to India.
The offer made to India by Iran’s Ministry of Industries, Mines and Trade covers liabilities between $50mln and $1bln per incident through sovereign guarantee and the government special fund.
India is among Asia’s major importers of energy and relies on Iran to meet part of its energy demand.
For the shipping liabilities of less than $50 million, however, an Iranian consortium led by the Central Insurance of Iran will provide the insurance coverage.
Political analysts believe that Iran’s offered assurances for its crude oil tankers will allay India’s concerns on the issue of insurance.
India continued crude imports from Iran despite the harsh western sanctions imposed against the oil-rich country.
India’s crude oil imports from Iran have increased by 21.1 percent in June 2013 compared to a year earlier despite the US-led sanctions imposed on the Islamic Republic's energy and financial sectors, recent data showed.
Essar Oil Ltd purchased 138,900 barrels per day (bpd) of Iranian crude oil in June, which marks a 16.3-percent growth compared to the previous month.
Managing Director of the MRPL P. P. Upadhya recently said the refinery stopped imports because local insurers said they could no longer cover plants that process Iranian crude.
European Union sanctions against Tehran have stopped European insurers, who dominate the marine insurance sector, from offering cover on Iranian crude. The sanctions, which prevent EU member states from purchasing Iran's oil or extending insurance coverage for tankers carrying Iranian crude, came into effect on July 1, 2012.
On August 1, 2012, the US Congress approved more illegal embargoes against Tehran, which seek to punish banks, insurance companies and shippers that help Tehran sell its oil. But the lack of shipping cover has failed to disrupt the flow of Iranian oil to Iran's major customers in Asia - China, India, South Korea and Japan.
Iran announced in July, 2012 that the country has set up a domestic consortium to provide insurance cover for the oil tankers which carry Iran's oil for exports.
"A consortium consisting of the internal insurance companies led by Bimeh Iran (insurance company) has been set up to provide insurance cover for the oil tankers which are tasked with exporting Iran's crude and oil derivatives (products)," Deputy Manager of Bimeh Iran Company for Technical Affairs Siavash Saeedian told FNA last July.
Iran has also voiced preparedness to provide insurance cover for all foreign ships and oil tankers. ...