Mumbai-based Indian shipper Mercator gave a crude oil tanker to the National Iranian Tanker Company (NITC) for carrying crude oil from the gulf country to India in December.
This is the first time that the Iranian firm chartered an Indian vessel covered under an insurance scheme arranged by New Delhi through state-run insurers, reports suggest.
NITC has chartered the vessel the Omvati Prem, owned by Mercator, to carry oil for Indian refiner Mangalore Refinery and Petrochemicals, reports indicate. The deal included cost, insurance and freight (CIF), reports suggest.
Union Minister of State for Oil Panabaaka Lakshmi informed Parliament in November on the insurance scheme. But she did not specify if Iran could charter vessels with Indian insurance cover for supplies.
Use of the scheme effectively transfers the liability for any damage or spill to India's state-run insurers, and ultimately to New Delhi. When NITC uses its own vessels, the liability stays with its Iran-based insurer.
India established the scheme to keep some oil flowing after EU sanctions came into effect and disrupted shipping. The government arranged emergency cover that was meant for use by Indian flagged vessels chartered by local refiners.
Mercator was the only company to use the scheme. Before NITC chartered the Omvati Prem, MRPL had used the vessel -- which can carry about 635,000 barrels -- to import Iranian crude.