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Indian Shipping Line Halts Oil Services to Iran

By MarEx 2013-03-01 15:20:00

India's Mercator Lines has stopped offering one of their ships for moving Iranian oil to India due political pressure from the United States. This further adds to the challenges Iran already faces in exporting its crude oil because of international sanctions.

The Omvati Prem was the only vessel backed by local emergency insurance and available for charter by Indian refiners, reports Reuters. Iran used the ship for the delivery of two cargoes to its top Indian client, refiner MRPL, which does not have the accommodations to take Tehran's larger vessels.

India is the world's fourth-biggest oil importer, and is in the process of expanding its refining capacity to meet rising local demand. The country ships in about 80 percent of its crude from overseas. According to Reuters, Indian insurance cover was meant to help local shippers and refiners continue to get oil supplies from Iran.

Iran chartered Omvati Prem in January with coverage provided by Indian insurance companies for supplying oil to MRPL in December.

The National Iranian Tanker Company (NITC) hired the Omvati Prem through Dubai-based Sea Enterprise Ltd. In February, the National Iranian Oil Corp. notified MRPL that its contract to use the Omvati Prem had ended.