Iran’s biggest tanker operator, NITC, has $1 billion in ship insurance cover to keep its fleet on the water and serve clients in Asia despite Western sanctions on the Islamic Republic’s oil trade, a senior NITC official said on Tuesday.
Washington and Brussels have put financial measures in place, including moves to prevent Tehran from gaining vital insurance cover, to make it tougher for Iran to pay for and ship oil.
The NITC official, who declined to be named, said his company’s Asian business was not affected. “We can trade with no problems at all everywhere in Asia.”
He declined to give figures for shipments, however, and his comments contrasted with evidence from Asian buyers that they were significantly scaling back purchases from Iran. These included a senior Chinese oil executive who said this week that refiner Sinopec will cut imports by up to a fifth this year.
Iran-based shipping sources said in April that Iran had been forced to deploy more than half of its national tanker fleet to store oil at anchorage due to the Western measures.
The National Iranian Tanker Company – now known as NITC – lost its ship insurance cover from European providers last year due to Western sanctions imposed on Iran. It secured alternative cover mainly in Asia and also in Iran from privately owned Kish P&I.
“We have $1 billion (in protection and indemnity cover). We can trade and go everywhere,” the official said.
“That is equivalent to the standard (industry cover) … and is acceptable to the shipping community,” said the official, who declined to be named.
Protection and indemnity (P&I) clubs, owned by their ship owner customers, were created to cover shipping companies against personal injury or environmental clean-up claims, dauntingly large costs for most commercial insurers.
Kish P&I relies on state-run Central Insurance of Iran as its reinsurer. Any claim made against it would likely have to go through a sanctioned bank. Nevertheless, Kish has said it is confident it would be able to pay Western ship industry claims in the event of accidents.
By comparison, Japan’s government submitted a bill on Monday to allow it to provide insurance for Iranian crude imports, which would enable it to make direct payments of up to $7.6 billion in the event of an incident involving a tanker bound for Japan.
OIL EXPORTS DROPPING
The U.S. government aims to aims to choke off Tehran’s oil revenue and force a halt to nuclear development it believes is aimed at making weapons.
On Monday, Washington added India and South Korea, but not China, to a list of countries exempt from sanctions that begin on June 28 – cutting companies off from the U.S. financial system. It noted they had made significant cuts in oil imports from Iran.
Iran says its nuclear program is for civilian purposes.
In April, two Iran based shipping sources said Iran had been forced to deploy more than half its fleet to store oil at anchorage in the Gulf, equating to 33 million barrels. Other industry sources have also estimated that Iran could be storing tens of millions of barrels of oil on tankers.
Asked how many vessels his company was using to store Iranian oil, the NITC official said: “It is not many.”
Last month the U.S. Senate approved a package of new economic sanctions on Iran’s oil sector that would extend measures to dealings with NITC and the National Iranian Oil Co, if they are deemed to be an agent or affiliate of the Revolutionary Guards.
It aims to close a potential loophole that could have allowed Tehran to continue selling some of its oil using its own fleet. NITC has denied any link to the Revolutionary Guards.
“NITC is a legitimate company and we think it is not fair that NITC should be targeted. We are not involved with the speculation that has been suggested,” the official said.
(Editing by Anthony Barker)
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