http://zeenews.india.com/business/economy/iran-oil-govt-mulling-sovereign-guarantee-for-shipping-lines_42975.html
New Delhi: India is considering providing sovereign guarantee to domestic shipping lines for import of crude oil from Iran which is facing sanctions from the US and Europe.
The sanctions prohibit EU-based entities from providing insurance and guarantees for transportation of oil from Iran. Most of the Indian shipping lines take protection and indemnity cover (P&I) mainly from them.
"The government is exploring options like sovereign guarantee and Cost&Freight (C&F)for importing crude from Iran in the wake of European sanctions...A decision will be taken in the next two-three months," Shipping Secretary K Mohandas told reporters here Tuesday.
The development comes in the wake of apprehensions from state-run SCI, the largest domestic tanker owner that it will not get international insurance cover following European Union sanctions against Iran announced on January 23.
Mohandas said the Shipping Corporation of India (SCI) has brought the issue to the notice of the government and deliberations are on.
"It is a problem area," he said adding that providing sovereign guarantee and C&F seems to be a practical solution.
C&F is a term of sale which means the seller will bear all expenses barring insurance charged up to the named port of destination.
SCI which operates about 40 tankers will lose its EU insurance coverage for its oil fleet operating in Iran from July 1, as European insurers will be prohibited from indemnifying ships carrying Iranian oil.Mohandas admitted that Indian firms are likely to be worst-hit by sanctions in Asia as neighbouring China and Japan fleets are covered by their domestic providers.
Apart from SCI, companies like Great Eastern Shipping and Mercator Lines have contracts with state-run oil companies like Indian Oil and Hindustan petroleum to import crude.
New Delhi: India is considering providing sovereign guarantee to domestic shipping lines for import of crude oil from Iran which is facing sanctions from the US and Europe.
The sanctions prohibit EU-based entities from providing insurance and guarantees for transportation of oil from Iran. Most of the Indian shipping lines take protection and indemnity cover (P&I) mainly from them.
"The government is exploring options like sovereign guarantee and Cost&Freight (C&F)for importing crude from Iran in the wake of European sanctions...A decision will be taken in the next two-three months," Shipping Secretary K Mohandas told reporters here Tuesday.
The development comes in the wake of apprehensions from state-run SCI, the largest domestic tanker owner that it will not get international insurance cover following European Union sanctions against Iran announced on January 23.
Mohandas said the Shipping Corporation of India (SCI) has brought the issue to the notice of the government and deliberations are on.
"It is a problem area," he said adding that providing sovereign guarantee and C&F seems to be a practical solution.
C&F is a term of sale which means the seller will bear all expenses barring insurance charged up to the named port of destination.
SCI which operates about 40 tankers will lose its EU insurance coverage for its oil fleet operating in Iran from July 1, as European insurers will be prohibited from indemnifying ships carrying Iranian oil.Mohandas admitted that Indian firms are likely to be worst-hit by sanctions in Asia as neighbouring China and Japan fleets are covered by their domestic providers.
Apart from SCI, companies like Great Eastern Shipping and Mercator Lines have contracts with state-run oil companies like Indian Oil and Hindustan petroleum to import crude.
and...
http://economictimes.indiatimes.com/news/politics/nation/india-debates-options-to-insure-iran-oil-cargoes/articleshow/12070793.cms
NEW DELHI: India is considering sovereign guarantees for its shipping lines and buying Iran oil on a delivered basis among ways to insure cargoes from July when European Union sanctions may halt current arrangements, shipping secretary K Mohandas said on Tuesday.
Indian shipping firms may lose EU insurance coverage for their vessels when they operate with Tehran from July 1 as European insurers will be prohibited from indemnifying ships carrying Iranian oil.
Iran is India's second-biggest supplier of oil after Saudi Arabia, with some $11 billion a year in shipments making up about 12 percent of India's crude import needs.
"Definitely it (P&I insurance coverage for vessels supplying Iran oil) is a problem area," Mohandas said.
He said other options like using P&I cover from other Asian insurance clubs and Indian insurance firms looks unlikely as these need re-insurance cover, which again could be difficult in the face of mounting pressure from western sanctions.
"The problem with P&I cover is the money involved is massive," he said, adding sovereign guarantees and purchase of Iran oil on a delivered basis look to be "practical solutions".
He said a final decision would be taken in next two to three months.
Europe and the United States are implementing tougher economic sanctions in the hope of isolating Iran and forcing it to halt its nuclear programme, which the West fears will be used to develop weapons.
Iran, the biggest producer in OPEC after Saudi Arabia and the world's fifth largest oil exporter, says its nuclear programme is purely for peaceful purposes. The sanctions have made it more difficult for Iran to sell its crude, and it will export a six-month low volume of fuel oil to east Asia in March. Volumes are likely to drop further as the EU embargo approaches.
Indian shipping firms may lose EU insurance coverage for their vessels when they operate with Tehran from July 1 as European insurers will be prohibited from indemnifying ships carrying Iranian oil.
Iran is India's second-biggest supplier of oil after Saudi Arabia, with some $11 billion a year in shipments making up about 12 percent of India's crude import needs.
"Definitely it (P&I insurance coverage for vessels supplying Iran oil) is a problem area," Mohandas said.
He said other options like using P&I cover from other Asian insurance clubs and Indian insurance firms looks unlikely as these need re-insurance cover, which again could be difficult in the face of mounting pressure from western sanctions.
"The problem with P&I cover is the money involved is massive," he said, adding sovereign guarantees and purchase of Iran oil on a delivered basis look to be "practical solutions".
He said a final decision would be taken in next two to three months.
Europe and the United States are implementing tougher economic sanctions in the hope of isolating Iran and forcing it to halt its nuclear programme, which the West fears will be used to develop weapons.
Iran, the biggest producer in OPEC after Saudi Arabia and the world's fifth largest oil exporter, says its nuclear programme is purely for peaceful purposes. The sanctions have made it more difficult for Iran to sell its crude, and it will export a six-month low volume of fuel oil to east Asia in March. Volumes are likely to drop further as the EU embargo approaches.
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