Shipping Corp. of India Loses Iranian Oil Shipment Due to Insurance Coverage

MUMBAI (Dow Jones)–Indian Oil Corp. (530965.BY) has canceled an Iran spot shipment contract with Shipping Corp. of India (523598.BY) because of the shipper’s inability to get insurance coverage in time, a senior executive at India’s biggest ship operator by fleet size said Friday.

“We were taking some time to get insurance coverage for the contract, so they chartered another vessel [from a different shipping company],” Sunil Thapar, director of the bulk carrier and tanker division at the company, told Dow Jones Newswires. He didn’t elaborate.

An Indian Oil spokesman didn’t immediately comment.

European insurance companies are reluctant to provide indemnity for transporting crude from Iran due to the U.S. and the European Union tightening sanctions against the Middle-Eastern nation for its alleged program to develop nuclear weapons. A full oil embargo by the EU will likely come into effect July 1. India has, however, said it will continue to import crude from Iran.

Thapar also said that Shipping Corp is still getting insurance covers on all its long-term contracts.

-By Anirban Chowdhury, Dow Jones Newswires