Indian shipping firms will continue to transport Iranian crude even if limited insurance coverage due to tightening Western sanctions leaves them financially exposed to a spill or accident, a top executive and industry sources said. Tough new European Union sanctions aimed at stopping Iran''''s oil exports to Europe also ban EU insurers and reinsurers from covering tankers carrying Iranian crude anywhere in the world from July.
Around 90 percent of the world''''s tanker insurance is based in the West, so the measures threaten shipments to Iran''''s top Asian buyers China, India, Japan and South Korea. The sanctions seek to stem the flow of petrodollars to Tehran to force the Opec member to halt a nuclear programme the West suspects is intended to produce weapons. Shipping Corp of India, which is the country''''s largest shipping firm, Great Eastern and other Indian tanker firms have asked state insurers to step in and provide up to $50 million in third-party liability coverage per tanker voyage.
The amount is a fraction of the typical $1 billion coverage that a supertanker carrying around 2 million barrels of crude would have from reinsurers against personal injury and pollution claims. India''''s shipping companies would run the risk of shipping the crude even though they would be liable for any claims above $50 million in the case of an incident, industry sources said. "To the best of our knowledge, over the last 10 years, none of the Indian shipping companies carrying Iranian crude oil into India has had any major incident relating to pollution or anything," Shipping Corp Chairman S. Hajara told Reuters on the sidelines of an industry conference in Singapore.
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