Sanction hits: Shipping Corporation tells IndianOil we can’t lift Iranian oil
Pune   01-Mar-2012

India’s import of Iranian crude oil is hit by US and EU sanctions as even state-run Shipping Corporation of India, citing insurance issues, has declined to provide its tankers to IndianOil for lifting Iranian oil.

An estimated 12 per cent of India’s total crude imports come from Iran.

SCI, the country’s largest domestic tanker-owner, has a contract with IndianOil under which it’s bound to provide cargo space at the desired time and for a specified freight. On January 27, IndianOil and SCI agreed to load an Iranian oil shipment between February15-17. Despite this, SCI cancelled the loading as its insurance-providers withdrew their cover on February 13. Not just that — IndianOil said other shippers, too, were reluctant to help because of the new “180-day rule” imposed by the US. Under this, a vessel is denied berth in a US port if that vessel entered ports in Iran, North Korea or Syria in the 180 days preceding its arrival in the US.

This is resulting in restricted availability of vessels for lifting Iranian crude oil,” IndianOil told Ministry of Finance in a recent note. “As a result, it has become extremely difficult to find a vessel for lifting Iranian cargo. Ship owners are not willing to offer their vessels for lifting Iranian cargo for fear of facing US/UN sanctions.”

As a solution, IndianOil has suggested India transport crude oil in tankers operated by the National Iranian Oil Corporation. One option being pushed by the Shipping Ministry is to provide sovereign guarantee to domestic shipping lines that would carry crude oil from Iran, an official said.