Indian Firms Scorn Insurance Sanctions on Iranian Oil

Industry sources said that the companies would risk the shipments despite the lack of coverage and increased liability, which could amount to billions should there be a major spill.

However, “To the best of our knowledge, over the last 10 years, none of the Indian shipping companies carrying Iranian crude oil into India has had any major incident relating to pollution or anything,” S. Hajara, chairman of Shipping Corp., said in the report. “Since there have been no claims in 10 years, we felt if we have cover of $50 million as a commercial organization it would be worthwhile for us to continue in that business.”

India, which is the world’s fourth-largest oil importer, is also one of Iran’s largest customers, accepting an average of 10 crude shipments a month to its west coast refineries out of the 2.2 million barrels per day Iran exports.

Hajara went on to say, “Exxon Valdez happens once in decades. If you think all your risk must be covered, then you should not be in business.” He added that oil spil liability limits have exceeded $1 billion, while other incidents have exceeded $3 billion. “We have been very clear that Indian insurance companies will have a tough task, if not impossible, to get reinsurance if the sanctions really set in. We know if we ask for a huge amount of cover we will never get it.”