Indian oil transportation companies will be able to receive some limited coverage from the government for oil tankers making trips to Iran, according to Reuters. The recent sanctions imposed against Iran for its continuing efforts to develop its nuclear program, and as many Western nations fear nuclear weapons, have largely prevented Indian oil companies from finding insurance for their oil ships.Insurance Insight provides some background:
In response, the Indian government has offered to insure as much as $50 million for any "Indian flag carriers" traveling to Iran. This amount falls well short of the actual liability incurred by oil tankers on any given trip, but it comes to more than six times as much as the Japanese government has offered its companies, illustrating India's interest in continuing the flow of Iranian oil.
The concern for Asian nations such as India, China and Japan has been that their ships, which are highly dependent on the International Group of Protection & Indemnity Clubs and its reinsurance programme, will be unable to sail if they cannot obtain cover.
Another Insurance Insight report on limitations placed by Japanese insurers on tankers carrying Iranian crude:
Japanese oil buyers will be forced to coordinate schedules after insurers warned they will cover only one tanker transporting Iranian oil at a time after the 1 July sanctions deadline.So, India and Japan as "sanction busters?"
According to Reuters, the three insurers together can provide only up to ¥30bn ($370m) at one time in hull and machinery cover, which protects vessels against physical damage, without relying on the European reinsurance market to hedge the risk.
This is enough to cover insurance for only one tanker travelling in the Gulf with Iranian crude oil, Insurance Insight understands.
Earlier report here, where China is added to the list of Iranian oil carriers.