Within hours the American official talking to oil buyers about reducing their purchases said the United States was “not too impressed” by the proposal.
Carlos Pascual did not say what kind of reduction would impress Washington, but as the Iran Times reported May 4, in the first quarter of this year South Korea cut its Iranian oil imports by 22 percent compared to the first quarter last year, while Japan cut back by 31 percent and China by 33 percent. By that comparison, the Indian proposal of an 11 percent cut doesn’t 
look like much.
Junior Oil Minister R. P. N. Singh told parliament of the 11 percent planned reduction Tuesday morning. It didn’t take long for Pascual, the State Department special envoy sent to countries buying Iranian oil to discuss cutbacks, to reply: “We are not too impressed today.”
One of the main factors driving importers away from Iran is the EU ban on providing insurance or reinsurance for any tanker carrying Iranian crude. Lots of non-European insurance is available around the world, but re-insurance is the domain of European firms. So, Asian insurers are dropping out of the Iran market in droves.
The EU ban is take effect July 1. But Reuters reports that Britain is seeking to induce its fellow EU members to delay the insurance ban for up to six months, arguing that it could cause a dangerous spike in prices. Many in Europe think Britain is just trying to protect its own reinsurance firms.
This is a major complication for South Korea and Japan, which are willing to cut back on Iranian oil buys but which may not be able to import any Iranian crude after July 1 because its own tanker firms would not load Iranian oil without huge insurance coverage to protect them in case of an oil spill. Insurance for one trip can extend up to $2 billion. Japanese firms are only offering $8 million in insurance without reinsurance. Indian firms are offering no more than $50 million.
Reuters said two EU officials told it that Britain wasn’t finding much support within the EU for its proposed delay.
Meanwhile, Taiwan, a small importer of Iranian crude, has announced that it will halt all purchases of Iranian crude as of July. (The EU sanctions take effect July 1 and the new US sanctions June 28.) But right now, Taiwan appears to be buying more Iranian crude than usual. According to a Reuters report, it will have bought two-thirds of its normal annual buy by July 1.
