- Renewed U.S. sanctions makes potential sellers and flag registries wary of doing business with Tehran.
- With U.S. sanctions in November, up to 10 new supertankers have stalled from South Korea.
- Panama removed nearly 21 Iranian tankers from its registry forcing Tehran to put the vessels under its own flag.
- The restrictions are on Iran’s port, energy and shipping sectors with temporary waivers to its 8 biggest oil customers.
- Iran needs effective fleet to ship and store and move oil which is crucial.
- Oil exports account for an estimated 70 % of Iran’s revenues and production about 2.8 million barrels a day, more than 9 percent of OPEC’s output.
Iran’s oil tanker fleet is being squeezed with the renewed U.S. sanctions, reports Reuters.
What is the issue?
Iran is running short of options to replace its ageing fleet of tankers and keep oil exports flowing.
The renewed U.S. sanctions are making potential sellers and flag registries wary of doing business with Tehran, Western and Iranian sources said.
Restrictions and Waivers
Since U.S. President Donald Trump re-imposed sanctions in November, exploratory talks with South Korea for up to 10 new supertankers have stalled and Panama has also removed at least 21 Iranian tankers from its registry forcing Tehran to put the vessels under its own flag.
Washington has put restrictions on Iran’s port, energy and shipping sectors but it has given temporary waivers to the country’s eight biggest oil customers, which include China, India and Japan, so they can keep buying Iranian crude.
With oil exports accounting for an estimated 70 percent of Iran’s revenues, maintaining a fleet of enough tankers to store and move that oil is crucial for Tehran.
Why sellers are being cautious?
But potential sellers of vessels are more wary under the new round of sanctions after a Greek network that helped Iran buy tankers under previous restrictions was blacklisted.
“Iran has been looking for ships, but this time round it is going to be harder – there is so much more scrutiny now. It is going to take them longer,” a shipping source said.
Approved exports too made complicated
Western insurers are steering clear of Iranian vessels and Iran’s attempts to export crude to the U.S.-approved buyers is further complicated by having to put its tankers under its own flag, rather than a third country such as Panama.
If Iran runs into difficulties exporting its oil it could have a significant impact.
OPEC’s output hit
Besides the importance of oil for its budget, Iran is estimated to produce about 2.8 million barrels a day, more than 9 percent of OPEC’s output.
“Whatever sector you look at, companies will keep in mind being cut off from the U.S. financial system when deciding whether to trade with Iran,” said Mehdi Varzi, an independent oil consultant who has previously worked at the state-run National Iranian Oil Co.
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