Iran has started to provide insurance over the oil shipments along with its own vessel to continue the flow of oil to India. With the trade war started by the U.S. President, Donald Trump, this move is considered as a power play by Iran.
The U.S. is reimposing economic sanctions against several countries including Iran. This drove away western insurers, and as a result, Tehran started to ship oil in its own ships to India including the provision of insurance cover for transportation to continue the deal with India. India is the second-biggest buyer of crude oil from Iran and the trade war of Trump will affect its economy gravely. In addition, most refiners in Asia-Pacific region depend upon the oil shipments from Iran. However, lately, they are gradually reducing the amount of oil intake from Iran as they want to maintain the relations with the U.S. financial systems when the new sanctions take in place. Therefore, Tehran insured oil cargos to India with the help of National Iranian Tanker Company (NITC). Experts believe that this move threatens both the U.S. sanctions and supply of oil.
On the other hand, India’s biggest oil refiner, Indian Oil Corporation (IOC), and the second-biggest refiner, Bharat Petroleum Corporation has started to lift oil from Iran ships covered with Iranian insurance.
In May, the U.S. withdrew from International nuclear deal with Iran and declared that the biggest economy in the world would reimpose sanctions, which will take effect in August. Moreover, Iran is hoping to sell more than 500,000 barrels per day of crude oil to India, who is the top buyer of China. As reported by Money Control, this Iranian move is to challenge both China and the U.S. in the oil trade war. However, officials from United India Insurance have not made any statement.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]