U.S.-led sanctions against Tehran claimed their latest casualty
Thursday, with state-run companies in India and Iran deciding to scrap a
37-year-old shipping joint venture because the unrelenting pressure was
making operations untenable.
The sanctions denied the joint venture's ships of insurance to
cover third-party claims in case of oil spills or other accidents.
Also, the curbs have made it very difficult for Iranian companies to do
business in U.S. dollars and euros -- the currencies of choice for
charter hires.
The joint venture -- Irano Hind Shipping Company -- will be
disbanded and its assets split between the Shipping Corp. of India
(523598.BY) and the Islamic Republic of Iran Shipping Lines, Shipping
Corp. Chairman Sabyasachi Hajara told Dow Jones Newswires Thursday.
Shipping Corp. owns 49% of Irano Hind, while the Iranian
company hold the rest. The joint venture has seven ships -- including
four crude carriers -- and is getting an eighth one built.
Another Shipping Corp. senior executive said that the joint
venture has been "rendered useless after all the sanctions. It also
hasn't got insurance covers. So it's best that the operations are
discontinued."
He added that the decision will have to be approved by the
Indian and Iranian governments.
The move to scrap the venture is a victory for the sanctions,
which have been imposed by the U.S. and Europe as well as the United
Nations to get Iran to abandon an alleged nuclear weapons program.
Tehran says its nuclear program is for peaceful purposes, such
as generating electricity.
India maintains that it follows only U.N. sanctions, and not
those imposed unilaterally by countries or blocks. But it has been
decreasing its crude oil imports from Iran, saying it wants to diversify
its sources and reduce dependence on any one country.
Iraq
replaced Iran as India's second-largest crude-oil supplier in the year
ended March 31 as New Delhi cut shipments ahead of impending sanctions
by the U.S. and the European Union on countries trading with Tehran.
In the financial year ended this March 31, shipments from Iran
to India fell 5.7% to 17.44 million tons. New Delhi aims to cut Iranian
imports to about 15.5 million tons this fiscal year
Irano Hind was formed in March 1975 to service the
government-run Kudremukh iron ore project in the south Indian state of
Karnataka.
It later diversified to other transportation services,
including shipping refrigerated foodstuff between India and Iran and
other countries.
The senior Shipping Corp. executive said the decision to scrap
the joint venture is unlikely to have a significant impact since the
company had already trimmed operations.
Also, it doesn't contribute significantly to Shipping Corp.'s
finances.
"The ships the company [Shipping Corp.] will get from Irano
Hind can be used on other routes," he said. Shipping Corp has a fleet of
75 ships, with 25 more on order.
The Islamic Republic of Iran Shipping Lines couldn't
immediately be reached for comment.