Indian Insurers Stop Covering Iranian Cargo

The first US sanctions against Iran will start from August 6 and a second series will begin from November 4th. (Photo Express / Prashant Nadkar / File)

National insurers, including New India Insurance (NIA), United India Insurance (UII) and Reinsurer GIC Re, have confirmed that they have ceased to provide insurance coverage. Insurance for Iranian cargoes, officials from the insurance sector said. 19659006] "Indian general insurers stopped covering Iranian oil shipments after May 8 and no existing cover is valid beyond November 4," said one official.

Public-sector insurers rely on reinsurance from GIC Re, which in turn depends on reinsurance companies in Europe and the United States to hedge their risk.

European and American reinsurers dominate the global market and are increasingly wary of the risk of sanctions being violated. India is the second largest buyer of Iranian crude after China and without insurance coverage to protect its mills, refineries in the country may have to reduce their imports earlier than expected.

"At the moment the situation is very strict and reinsurers (American and European) do not offer any coverage for activities related to Iran," said a source at GIC. Without the support of global reinsurers, Indian insurance companies will struggle to manage risk.

Indian oil companies are trying to get insurance coverage from Iranian companies, insurance officials said. The Center recently approved a proposal from the Iranian private lender Bank Pasargad to open a branch in Mumbai. The Ministry of Finance told the Reserve Bank of India that it was not opposed to Tehran-based Bank Pasargad opening its branch in India.

The authorization of the Iranian bank intervenes while the United States announce sanctions and ask to other countries

The first American sanctions against Iran will start from August 6 and a second series will start from November 4th.

In May, the United States announced that it was planning to reimpose certain sanctions against Iran. from August, with full penalties in place in November, after the withdrawal of a 2015 agreement with Iran limiting its nuclear program. Hindustan Petroleum Corp. (HPCL) reportedly canceled the purchase of a cargo of Iranian oil earlier this month after its insurance company refused to hedge crude oil because of US sanctions.

According to the international group of clubs P & I organization whose members cover 90% of the world tanker fleet against the risks of oil spills, the return of sanctions will likely have "significant ramifications" For maritime trade with Iran. These impacts will become visible only once the US partners to Trump's decision, and when the details of how US measures are implemented are clear.

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