File photo shows an oil tanker carrying Iran's oil.
India has authorized state-run insurers to provide limited cover to its tankers transporting Iran's oil in an attempt to prevent any interruption in supplies, following the US-engineered European Union insurance bans against Iran.
India's state-run insurance firms have agreed to provide each Indian ship owners carrying Iranian oil $50 million in cover. The state-run General Insurance Corp. will reinsure the cargoes.
The offer is much lower than the up-to-one billion dollar bids that European insurers would normally give per ship to cover third-party claims in the event of an oil spill or other accident.
"Our exposure would run into billions of dollars, but since there haven't been many insurance claims in the last several years, we have taken a pragmatic view," said Sabyasachi Hajara, the chairman and managing director of the state-owned Shipping Corp. of India, the country's biggest shipper of crude from Iran.
On July 1, the European Union’s sanctions against Iran's oil and financial sectors entered into effect.
The sanctions prevent all the EU member states from purchasing Iran's oil or extending insurance coverage for tankers carrying Iranian crude.
The sanctions have been imposed based on allegations that Iran is seeking to acquire a military nuclear capability. Tehran has refuted such allegations, noting that frequent inspections by the International Atomic Energy Agency have never found any diversion in its nuclear energy program toward military purposes.
On July 5, President of the Central Insurance of Iran Seyyed Mohammad Karimi condemned EU’s insurance ban against Iran as a blatant violation of human rights and a threat against people’s peace and security.
He noted that following unfair sanctions against the country, all Iranian insurance companies have bolstered their synergism and cooperation and have “turned threats into an opportunity.”