June 27 ------ India has allowed state refiners to import Iranian oil, with Tehran arranging shipping and insurance, from July 1, keeping purchases of over 200,000 barrels per day (bpd) flowing after European sanctions hit insurance for the cargoes, government and industry sources said.

India, one of Iran's biggest crude buyers, has just secured a waiver from U.S. sanctions which target Tehran's nuclear ambitions by cutting imports over 20 percent. But European sanctions that come into effect from July 1 ban insurers and reinsurers from covering shipments of Iranian oil, leaving buyers in Asia - Iran's biggest market - struggling for cover.

Around 90 percent of the world's tanker fleet is covered by Western-based protection and indemnity (P&I) clubs, which insure against personal injury and environmental clean-up claims. Among other Asian buyers of Iran oil, Japan will provide sovereign guarantees for Iranian shipments, China has asked Iran to deliver the crude while South Korea will halt imports from July. Unlike private refiners, India's state-run companies need government permission to import oil on a CIF basis as federal policy requires them to favour Indian insurers and shippers by buying only on a Free on Board (FOB) basis. India aims to buy 310,000 bpd of oil from Iran under contracts during the fiscal year from April to March, which includes 100,000 bpd of purchases by Essar Oil, the only private customer.

Source: hellenicshippingnews.com