European ship owners could violate impending EU sanctions against Iran without even knowing it every time they set sail, leaving them vulnerable to being blacklisted, the managing director of leading industry group Intertanko said on Friday.
Vessels ranging from tankers to dry bulk vessels to containers run the risk of falling foul of the sanctions every time they refuel, because fuel from various origins – including Iran – are blended at trading hubs, Katharina Stanzel, who takes her role in July, told Reuters.
Intertanko’s members own the majority of the world’s tanker fleet.
“For us, it is a huge problem … it’s really difficult to say is it or is it not (from Iran),” Stanzel said ahead of an industry conference in Singapore.
“It’s like taking orange juice from the hotel buffet. It will be really difficult to tell if it was made here or somewhere in California because it has been processed so much.”
The European Union is preparing to slap a total embargo on the purchase of Iranian crude and oil products, which includes fuel oil, from July to pressure Iran to halt its disputed nuclear program.
Most European shipping firms have stopped transporting Iranian oil products ahead of the sanctions but could still face the risk of violating the measures when their vessels refuel.
Iran is OPEC’s largest residual fuel oil producer, pumping 472,000 barrels per day in 2010, according to the latest data from the Organization of the Petroleum Exporting Countries. Most of Iran’s exports go to East Asia, the top fuel oil market.
A Singapore-based bunker trader said that ship-owners were starting to require assurances from bunker suppliers that the fuel did not originate from Iran.
“There are so many uncertainties with those sanctions because they are untested and the way they are formulated they are meant to hit as broadly as they can,” Stanzel added.
Although non-European ship-owners do not fall under the EU sanctions regime, they could lose access to the Western-dominated maritime insurance and reinsurance markets if they violate the measures.
Britain, along with major Iranian oil buyers Japan and India, is lobbying fellow European Union members to postpone by up to six months portions of sanctions that cover the maritime industry because they could cause a spike in oil prices.
Ship owners who violate EU sanctions have a viable defense if they can prove they “did not know and had no reasonable cause to suspect that their action would infringe these prohibitions,” said Jonathan Hare, senior vice president for Norwegian-based maritime insurer Skuld.
(Editing by Miral Fahmy)