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India is due to receive the first state-insured oil cargo from Iran in weeks after New Delhi joined Tokyo in offering government-backed insurance for ships carrying Iranian crude in order to bypass European sanctions against Iranian supplies.
The first Indian ship to carry oil from Iran with Indian insurance is scheduled to load up in Iran on Wednesday, a shipping company executive said. This is a breakthrough for the Indian government, which has sought to maintain vital Iranian oil imports after European sanctions blocked third-party insurance in July.
The MT Omvati Prem - a tanker contracted to carry 85,000 metric tons of crude oil from Iran for Indian state refiner Mangalore Refinery and Petrochemicals Ltd. - is scheduled to arrive in India by Aug. 25, said Kowshik Kuchroo, president of shipping for Mercator Ltd., an Indian shipping company.
"This being a government of India cargo, it has a different sense of importance. Were not doing it just for business," Kuchroo said Monday. "India is in definite need of the crude. We cant just snap the supply."
Mercator is insuring the ship with $50 million in hull and machinery insurance, which covers physical damage to the ship, from state-owned New India Assurance Co. Its insuring the vessel with another $50 million in protection and indemnity insurance, which covers a broad range of liabilities, including environmental pollution and cargo damage, from government-backed United India Insurance.
European Union sanctions that prohibit EU companies from offering insurance on tankers carrying Iranian crude took effect July 1, part of the US-led effort to tighten sanctions on Iran to make the country give up its nuclear rights.
China, India, Japan and South Korea are among Irans most important oil export markets. Japan was the first country to devise a workaround to the EU sanctions, offering its shippers a robust $7.6 billion per tanker in government-backed insurance for oil cargo from Iran. Japans Parliament passed the emergency measure in late June to avoid a disruption to critical oil supplies due to actions against Iran.
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