New Delhi: MRPL, the nation's largest buyer of Iranian crude oil, will cut oil imports from the Persian Gulf nation by over 20 percent this fiscal but uncertainties remain on how the oil will be shipped from July in absence of insurance cover.

"MRPL reduced crude oil import from Iran to 6.3 million tons in 2011-12 from 7.1 million tons in 2010-11. This year it will import 5 million tons," MRPL Chairman Sudhir Vasudeva told reporters here.

Vasudeva, who is also the Chairman and Managing Director of Oil and Natural Gas Corp (ONGC), said MRPL was increasing imports from Kuwait and Abu Dhabi to make up for shortfall from Iran.

Mangalore Refinery and Petrochemicals Ltd or MRPL is a unit of ONGC. Separately, Hindustan Petroleum Corp Ltd (HPCL) said it will cut imports from Iran by 15 per cent to 1.5 million tons this fiscal.

Essar Oil, the second largest user of Iranian oil in the country, too is reducing imports from 100,000 barrels per day (5 million tons) to 85,000 bpd.

However uncertainties remain on shipping of oil from next month end. Fresh US legislation that targets Iran's oil industry is to come into force on June 28. Also, European Union states are to impose a total ban on shipments of Iranian crude oil in July.

Indian refiners are finding ships with insurance cover, to ferry oil from Iran. Insurance companies are refusing to cover for risk.

"There is a possibility of stoppage of oil from July if we don't get insurance," HPCL Chairman and Managing Director Subir Roy Choudhary said here.

Vasudeva said there are difficulties but "local insurance companies" are likely to provide cover. Indian refiners are currently paying in euros for Iranian crude imports through Turkey's Halkbank.


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