The Indian insurers are not offering coverage policies for storage of Iranian oil, an Indian Oil Corp Ltd official said, owing to impending US sanctions on import of crude from Iran, which are expected to kick in on November 4.
“Insurance companies are providing for asset cover but are not covering the crude kept in storage,” Reuters quoted the official as saying on condition of anonymity.
India had contracted to import about 25 million tonnes of crude oil from Iran in the fiscal year 2018-19 (April 2018 to March 2019), up from 22.6 million tonnes imported in 2017-18.
US sanctions against Iran oil sector kick in from November 4 that will block all payment routes to the Persian Gulf nation.
Officials said supplies from Iran will not be a problem till month end, leaving only five months of contracted supplies at risk.
Those volumes can be easily covered by exercising optional volumes available in contracts with Saudi Arabia, Iraq and other suppliers.
“Every year when we sign term contracts with suppliers, there is an optional volume built in. This volume is to take care of any exigencies. Such optional volume is more than enough to make up for five months of Iranian oil supplies,” PTI quoted another official as saying. “We have all plans in place for supplement any lost Iranian volume.”
India, the world’s third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran is its third-largest supplier after Iraq and Saudi Arabia and meets about 10 per cent of total needs.
