Iran's Oil Partner in India to 'Stop' Crude Oil Imports from Iran

Three informed sources reported to Reuters on Thursday that the 'Chennai Petroleum' refinery in India will stop importing and refining Iranian crude oil from October, in ten days. According to these sources, the refinery is trying to maintain its insurance coverage after the new U.S. sanctions against Iran began. The 'United India Insurance Company' has informed 'Chennai Petroleum' that under its new annual policy, effective from October, it will not cover matters related to refining crude oil from Iran. This has led the refinery to cancel a scheduled loading of about one million barrels in October. The U.S., which recently withdrew from the international nuclear agreement with Iran and imposed new sanctions, is set to impose heavy sanctions on Iran's oil exports starting November 4, coinciding with 13 Aban. However, since banks, shipping companies, and insurance companies have already halted their business relations with Iran, the issue of purchasing crude oil from Iran has begun much earlier than 13 Aban. Indian insurance companies are not directly under U.S. sanctions, but their trade with Iran could negatively affect their interactions with the Western insurance market. 'Niftiran Intertrade', a commercial branch of the National Iranian Oil Company, holds 15.4% of the shares of 'Chennai Petroleum'. 'Chennai Petroleum', a subsidiary of India's largest oil company (IOC), had signed a contract to purchase two million barrels (40,000 barrels of oil per day) from Iran in the 2018/19 fiscal year. The decline in demand from 'Chennai Petroleum' will reduce India's oil imports from Iran by about ten million tons in October. 'Chennai Petroleum' has two refineries with a capacity of 230,000 barrels of oil per day, and in the absence of these two refineries, there are only two other Indian customers left for Iranian oil, namely the Mangalore refinery and the Indian Oil Company. Bijan Zanganeh, Iran's oil minister, had previously expressed hope that Tehran could sell 500,000 barrels of crude oil to India daily.