Friday 22 June 2018

Iran 'has mostly overcome sanction challenges'

Tehran, December 23, 2012

Western sanctions on Iran's shipping and energy sectors caused serious problems for its oil industry earlier this year but Iran has mostly overcome those challenges, Oil Minister Rostam Qasemi was quoted as saying on Sunday.

Iranian officials usually play down the impact of US and European restrictions on the country's oil industry, but Qasemi said that Iran had faced some difficulties selling its oil this summer.

"In the month of Tir (June 21-July 21) there were difficult conditions for the oil industry," Qasemi was quoted as saying by Iran's state news agency IRNA.

"One of the problems was the issue of transporting oil was not possible for any ship to enter our ports."

"On top of this, the insurance for ships carrying crude oil was taken away ...and the import of many goods used in the development of the oil industry was banned."

Sales dropped sharply to about 800,000 barrels per day (bpd) in the June 21-July 21 period but recovered afterward, Mohammad Reza Bahonar, deputy speaker of Iran's parliament, said in September.

The International Energy Agency estimates Iran's crude shipments fell to multi-year lows of 1.07 million bpd in September but rose to 1.3 million in November, remaining well below about 2.3-2.4 million bpd last year.

The European Union imposed sanctions in July against Iran's oil and shipping industries which barred Europe-based insurers from covering tankers that carry Iranian oil.

New EU sanctions took effect on Saturday which add bans on financial transactions and on sales to Iran of shipping equipment, among other measures.

The tough measures reflect heightened concerns over Iran's nuclear programme, which Western countries fear is aimed at developing an atomic bomb though Iran insists the programme is peaceful.

Yet Qasemi said on Sunday that Iran had managed to find ways to rout the sanctions.

"Following on the imposition of these sanctions, for two months we had bad conditions. With the planning that has occurred we have nearly put this ravine behind us," Qasemi said.

"The issue of oil tankers has been solved and today we are able to export all crude oil."

One strategy which Iran has employed to get around the ban on European cover for vessels carrying its oil, Qasemi said, was to establish international cover through Iranian firms such as Kish P&I.

"Today we not only insure our own ships, we insure the ships of other countries as well," Qasemi said.

Europe's so-called Protection and Indemnity (P&I) clubs account for the majority of cover for the tanker market. These specialist insurers dominate the market for insuring ocean going ships against pollution and injury claims.

Kish, founded last year and dependent on reinsurance from a state-run body to cover liabilities, is a newly created player modelled on the P&I clubs.

Analysts say one potential drawback for vessels insured by Kish is that it may struggle to pay claims outside Iran because the sanctions prevent banks from channeling cash out of the country.

Iran has said in the past it has allocated billions of dollars to insure its own oil tankers.-Reuters

Tags: Oil | Iran | Sanctions | vessel | challenge |

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