In a bid to cover insurance as sanction loom, Chennai Petroleum cancelled Iranian crude oil imports from October, reported Economic Times.
Earlier this year, US President Donald Trump announced new sanctions against the country after the withdrawal of an international nuclear deal with Iran. America restricted the use of US dollar against pay Iran from November 1. It is now seeking support from allies to cut Iranian oil imports to zero soon after the sanction on the petroleum sanction commences in November. Reportedly, Iran is the third largest producer of among OPEC (Organization of the Petroleum Exporting Countries).
India does not have a direct impact of the sanction but the country is looking for safeguard against the risk in the Western reinsurance market, which is against Iran.
Media reports suggested that United India Insurance under its new annual policy decided not to completely cover imports of crude from Iran. As a result, Chennai Petroleum has to withdraw an order for a scheduled loading of 1 million barrels in October.
“Reinsurers have said they can not provide full 100 per cent cover. They have agreed to provide support for only 85 per cent cover.” reported an anonymous source to Economic Times.
Iran now has only Managalore Refinery and Petrochemicals Ltd, and IOC as their major clients in India after Chennai Petroleum reduced the oil proceedings.
Another media story from TOI revealed that India is in contact with the European Union to figure an alternate payment mechanism for oil imports from Iran.
United India Insurance and Chennai Petroleum are yet to comment on this matter.