The National Iranian Tanker Co. is close to obtaining new insurance needed to boost crude exports and resume trade with old customers after four years of sanctions.
NITC has been negotiating with foreign organizations for the past six months to get its vessels classified, insured against risks like oil spills and registered internationally and is “close to an agreement,” Nasrollah Sardashti, director of commercial affairs, said in an interview Tuesday in Tehran. All three are needed for Iran to be acceptable to previous major buyers, including those in Europe, he said.
“With the termination of the sanctions over Iran and our intention to return to the global market, we need to change or upgrade the three,” Sardashti said. The flag NITC’s ships fly, which is based on where they are registered, “should be also acceptable to our old major crude buyers.”
Iran was declared in compliance with its obligations under a nuclear agreement on Saturday, paving the way for the removal of sanctions that curbed its exports. Oil analysts surveyed by Bloomberg anticipate the nation will ship 100,000 barrels a day more crude within a month of sanctions ending, and four times that within half a year. Iran says it will boost exports by 500,000 barrels a day right away.
Iran has been allowed to ship oil to China, India, South Korea, Turkey and Taiwan after sanctions were tightened in 2012. “We will continue to do so in the near future which includes the month to come as our contracts are not going to expire by the end of the current month,” he said.
Iran has been using Kish P&I, backed in part by the government, for insurance on existing shipments and now needs to go the International Group of P&I Clubs for expanded coverage, Sardashti said. The organization’s 13 members protect more than 90 percent of the world’s crude carriers against risks including spills.
NITC has 42 very large crude carriers, nine suezmaxes five aframaxes and several other ships, with the fleet’s average age at nine years, he said. “In order to go to international market, in Europe, West Africa, the Mediterranean, Canada or generally our previous destinations, some of our ships are a little old and need to be replaced. We are presently in negotiation with a number of foreign banks to secure the necessary financing to go ahead with the modernization plan.”
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