India's Biggest Refiner Rejects Reports about Policy of Decreased Crude Imports from Iran

Managing Director P.P. Upadhya had earlier told reporters that MRPL is increasing spot cargo purchases to make up for shortfall in Iranian imports.

But, Reuters quoted another MRPL official as saying that the company does not intend to lower crude imports from Iran and the recent decrease in imports happened only because the refiner is facing problems in receiving shipments because of insurance and shipping difficulties caused by European Union sanctions on Tehran.

An oil embargo by the European Union took effect on July 1 and bans firms from insuring Iranian shipments.

In response, the Indian government, similar to Japan, started insuring its crude cargos. Earlier this month, the New Delhi government ordered Indian state-run insurers to provide cover to the country's ships transporting Iranian oil, allowing refiners to avoid any interruption in supplies due to the western sanctions.

United India Insurance Co. has agreed to provide protection and indemnity cover to Indian tankers carrying oil from Iran with General Insurance Corp. offering reinsurance.

The offer has brought relief to Indian shipping companies that aren't getting covers from European insurers since July 1 for carrying shipments from Iran, which is facing sanctions from the US and European Union for its decision to continue using its international nuclear rights.

Meantime, Indian Essar Oil refinery significantly raised imports from Iran in June despite the western sanctions against the Islamic Republic that came into effect from July.

Essar, which recently expanded its Vadinar refinery in western Gujarat state to 400,000
barrels per day (bpd), returned to importing Omani crude in June, the data shows, after a gap of 29 months, as the complexity of its plant has also been increased to process heavy and ultra heavy grades.

The private refiner more than trebled monthly imports from Iran in June to 114,700 bpd --
and they were about 70 percent more than a year ago. Essar is set to become the biggest Indian buyer from the Islamic Republic in July replacing Mangalore Refineries and Petrochemicals Ltd

Essar got nearly 44 percent of its crude imports from Iran in January-June.

Overall imports by Essar rose nearly 17 percent during January-June to 284,400 bpd, the data shows.

The Indian government has stressed that it will continue oil imports from Iran irrespective of the western sanctions as it cannot replace Iran with any other energy supplier.
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