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03-08-2013, 07:30 PM #1
India set to halt Iran oil imports over insurance: MRPLNEW DELHI: India is set to halt all crude imports from Iran because insurance companies in the country have said refineries processing the oil will no longer be covered due to Western sanctions, the head of refiner MRPL said on Friday.
India is Iran's second-largest buyer, taking around a quarter of its oil exports worth around $1 billion a month.
"If cover is not available then all Indian refiners will have to halt imports from Iran or else they will have to take a huge risk," P P Upadhya, managing director of Mangalore Refinery and Petrochemicals LtdBSE -0.62 %, told Reuters in a telephone interview. MRPL is India's biggest buyer of Iran crude.
"Insurance companies said if I buy Iranian crude my refinery's insurance cover will be cancelled ... If we don't get insurance for the refinery then we will stop buying Iranian crude."
It was not immediately clear why this has become an issue now, several months after Europe and the U.S. introduced tough sanctions aimed at Iran's oil trade to force Tehran to the negotiating table over its nuclear programme.
But in a letter in January seen by Reuters, the General Insurance Corp of India, the national reinsurer, told the General Insurance Council, an industry group, that it had "dawned" on insurers that cover and losses on processing the crude would not be payable by reinsurers due to existing sanctions.
A source at another refiner that buys Iranian crude, Hindustan Petroleum Corp (HPCL), also said imports were threatened by the insurance problems.