TEHRAN - While the suspense prevails over India’s decision to continue oil imports from India in the wake of crippling economic sanctions by the U.S., Iran has started providing ships as well as insurance cover to Indian companies to continue the oil trade, according to reports.

India, which recently became the second biggest buyer of Iranian crude oil after China, has been torn between Washington and Tehran on the issue of oil imports in the wake of U.S. sanctions against Iran. To ensure India continues oil trade with Iran without any roadblocks, latter has started providing shipping insurance.

India is now the top oil client for Iran after China, having shipped in 5.67 million tonnes or about 457,000 barrels per day (bpd) of oil in the first three months of this fiscal year, India’s Union Petroleum and Natural Gas Minister Dharmendra Pradhan told parliament in a written reply a few days ago.The U.S. sanctions threaten to cut off access to the American banking system for foreign financial institutions that trade with Iran, due to which European re-insurers have refused to give insurance cover to firms importing crude oil from Iran.  

The reports said that Iran is using its own ships to transport oil to India as not many shipping lines participated in recent tenders for transportation of Iranian crude oil. A few weeks ago, Indian oil firm Hindustan Petroleum Corp Limited (HPCL) had to cancel the purchase of an Iranian cargo after it faced issues related to insurance cover.

Other major Indian companies like Indian Oil Corporation (OIL) would renew their insurance cover in next few months and by that time the situation on Iran would be clearer, the reports said.
India is now the top oil client for Iran after China, having shipped in 5.67 million tonnes or about 457,000 barrels per day (bpd) of oil in the first three months of this fiscal year, India’s Union Petroleum and Natural Gas Minister Dharmendra Pradhan told parliament in a written reply a few days ago.
However, India has been under pressure to cut the oil imports from Iran following U.S. sanctions on Iran. New Delhi had initially said they do not recognize unilateral sanctions imposed by Washington, and only recognize UN sanctions. However, everyone was taken by surprise when reports emerged that a message had been sent across to refiners to be prepared for drastic cut in oil imports.
However, following the public backlash, Indian government said that it will take a “considered and considerate’ view based on ‘national interest’ on the issue of U.S. sanctions against Iranian oil and find a way to secure its energy needs.