Iran- Coming in from the cold?

Nov 29 2013

The European Union (EU) has lifted the ban on insuring tankers carrying Iranian crude, following the nuclear deal reached in Geneva last weekend. The EU had banned Iranian oil imports in July 2012.

Indian refiners told Bloomberg news agency that this move will ease the import of Iranian oil.

According to a EU report, the insurance restrictions affected about 95% of the global tanker fleet, as the ships were covered by European law. Under the rules, ships transporting Iranian oil would invalidate its insurance against risks including spills and collisions.

Japan's government started providing sovereign cover for its tanker operators, while India was looking into an INR20 bill ($320 mill) fund to help cover imports, Bloomberg said.

Last week, only six countries remained from the 23 Iranian crude importers recorded in 2012. These were China, India, South Korea, Japan, Turkey and Tawain, according to US officials.

The EU agreed to release $4.2 bill in frozen oil assets and let Iranian oil exports continue at current levels in exchange for limiting its nuclear programme, according to its report.

However, this won't mean an increase in shipments after Iranian oil exports were cut by 60% in 2012, the US government statement said.

Indian oil importers Indian Oil Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals said that the removal of the EU ban will enable them to purchase contracted volumes more easily. However, they do not intend to buy more than what was previously planned, Bloomberg said.  

Meanwhile, National Iranian Tanker Company (NITC) was reported to have started negotiations with domestic and international shipping companies with the aim of boosting oil exports.

NITC's managing director Ali Akbar Safae told the Shana news agency that the text of the agreement signed in Geneva, which pointed towards some softening on sanctions against Iran, does not clearly refer to the methods of removing sanctions pertaining to shipping industry, but the company welcomed any practical agreements to facilitate shipping services.

He said that maintaining Iran's oil exports at current levels, suspending the US and EU sanctions on insurance and transportation of oil cargos and the lifting sanctions on petrochemical exports and its related services, including insurance, finance and transportation, are part of the deal between Iran and the group of countries who signed the action plan.

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