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Iran tanker firm delays fleet expansion

London, June 26, 2012

Iran's main oil shipper NITC has delayed the expansion of its oil tanker fleet, industry sources said, as tough Western sanctions on the Opec member's crude exports and a weak freight market hurt the company's ability to turn a profit.

The delay could indicate that NITC has enough capacity with its existing 39-tanker fleet to deliver crude to its Asian customers, which have cut purchases by about a fifth from last year's 1.45 million barrels per day in preparation for new European Union sanctions against Tehran.

Iranian tankers will be the only vessels able to transport the Islamic Republic's crude to its two top importers, China and India, once the sanctions come into effect on Sunday.

A senior NITC official told Reuters the firm has yet to take delivery of a 318,000 deadweight tonne tanker named 'Safe', the first of 12 new supertankers the firm will manage under a $1.2 billion contract with Chinese shipyards. Delivery was initially scheduled for May.

'Delivery has been delayed because of the market. The market is not attractive for any ship owner,' the NITC official said.

The Baltic Exchange's Dirty Tanker index fell to a 17-month low of 660 points on Monday, down nearly 30 per cent in the last six months due to an oversupply of vessels and slowing global oil demand growth.

Industry officials believed the delay in delivery of the vessel was also due to Western sanctions, which have made it difficult for Iran to sell its crude.

'With their (Iran's) export capacity being reduced, they (NITC) probably do not want to take delivery of them right now because they may find it difficult to trade them and for people to accept cargoes and get the vessels insured,' said a senior ship industry official.

'They (NITC) might also have financing problems to pay for the delivery instalments.'

The US and Europe have targeted Iran's oil trade to pressure Tehran to halt its disputed nuclear programme.

Washington will impose sanctions this week on financial institutions dealing with Iran's central bank, while Brussels will place an oil embargo on the country's oil trade.

The EU's sanctions also prohibit European insurers, which provide cover for nearly all of the world's tanker fleet, from doing business with ships carrying Iranian crude.

It was not clear when NITC will take the tanker, capable of carrying 2 million barrels of crude, nor whether delivery of the other vessels will also be delayed.

Another seven very large crude carriers are scheduled for delivery by the end of this year from two Chinese shipyards, and the remaining four are expected to be commissioned by the end of 2013.-Reuters




Tags: Iran | NITC | fleet | Expansion | market | Sanctions | oil tanker |

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