India offers $50MM in coverage for Iranian tanker runs

Indian oil transportation companies will be able to receive some limited coverage from the government for oil tankers making trips to Iran, according to Reuters.

The recent sanctions imposed against Iran for its continuing efforts to develop its nuclear program, and as many Western nations fear nuclear weapons, have largely prevented Indian oil companies from finding insurance for their oil ships.

The sanctions have sought to restrict Iranian oil funds by cutting the country off, and any companies that choose to deal with, from access to the Western financial sector.

In response, the Indian government has offered to insure as much as $50 million for any "Indian flag carriers" traveling to Iran. This amount falls well short of the actual liability incurred by oil tankers on any given trip, but it comes to more than six times as much as the Japanese government has offered its companies, illustrating India's interest in continuing the flow of Iranian oil.

The Economic Times reports that, despite this interest, Indian crude imports from Iran plummeted 10 percent in March.

Analyses of Indian oil demand and production can be found at PennEnergy's Research area.

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