Amid Threat Of Sanctions, Iran Throws In Shipping, Insurance To Make Its Oil More Attractive For Indian Firms

As negotiations between India and United States (US) continue over sanctions against importing Iranian oil, Iran is offering its own ships to transport oil to India, The Pioneer has reported . In addition to this, Iran is also offering insurance for the oil shipments.

The US which had earlier pulled out of Iran nuclear deal has threatened to reimpose sanctions on Iran. The possibility of sanctions has led to concerns over access to American banking networks and European insurers for Iran’s oil trade with India. Iran had recently emerged as the second largest oil supplier to India.

To further facilitate its oil trade with India, Iran has setup an alternate route for India to pay for oil imports, The Economic Times has reported. Private Iranian lender Bank Pasargand has received approval from the Finance Ministry for opening a branch in Mumbai which will be used for settling payments with Iran for the imports.

Although the Iranian oil companies won’t be able to repatriate the money back home, they will be able to earn interest on the deposits in the bank.

Earlier UCO bank and Turkey’s Halkbank were used to pay for Iranian imports in Indian rupees and Euros respectively. The Halkbank route, however, was shut in less than a year. Iran was using rupee payments deposited in UCO bank to pay for its drug and food imports from India.