State-run Shipping Corp. of India, the largest tanker owner in India, will lose its EU insurance coverage for its oil tankers operating in Iran from July 1, when European insurers will be prohibited from indemnifying ships carrying Iranian oil.
Indian maritime firms are likely to be the most affected in Asia by the sanctions as the other two biggest buyers China and Japan do not rely on European insurers but are covered by domestic providers. India, China and Japan are Iran's three biggest crude oil buyers.
"We are covered by P&I clubs in the EU," Sunil Thapar, director at Shipping Corp of India told Reuters, referring to the groups of customer-owned maritime protection and indemnity insurance groups.
"These clubs will not be able to give us coverage for vessels to Iran from July. It will be difficult for Indian shipping lines to transport Iranian crude unless alternative arrangements are made." SCI owns 39 oil tankers.
Europe and the United States are implementing tougher sanctions in the hope that isolating Iran will force Tehran to halt its atomic programme, which the West fears will be used to develop nuclear weapons.
Iran, the biggest producer in OPEC after Saudi Arabia, denies Western suspicions that its programme has military goals, saying it is for purely peaceful purposes.
Iran, the world's fifth-largest oil exporter is struggling to retain its top consumers as stricter sanctions and an embargo make it impossible to trade with the Islamic Republic.
Iran will export a six-month low volume of fuel oil to East Asia in March due to sanctions and volumes will likely drop further as the EU embargo approaches.
FEWER OPTIONS A.P. Moller-Maersk, Singapore-based Samco Shipholding, and many other international maritime firms have halted new deals with Iran, leaving Asian oil importers to rely more on domestic and state-run firms to handle the OPEC member's shipments.
All but one of the international P&I clubs, which together cover 95 percent of the world's tankers against pollution and personal injury claims, are covered by the sanctions since they are based in the European Union or the United States.