Sadie Keljikian, Top Billion Finance
At least twenty-six Asian and European tankers are shipping Iranian oil, according to Reuters.
International sanctions on Iran were lifted in January, allowing foreign importers to once again take advantage of the country’s vast supply of crude oil. “Charterers are buying cargo from Iran and the rest of the world is OK with that,” said Odysseus Valatsas on the matter. Valatsas is the chartering manager at Dynacom Tankers Management, which has fixed three of its supertankers to carry Iranian oil.
While the 26+ tankers already in service have the capacity to carry more than 25 million barrels of oil, traders still face regulatory obstacles. Many carriers are still quite reluctant to handle Iranian oil, largely due to remaining US restrictions on Tehran, which tightly restrict trade in dollars or involvement of US firms, including re-insurers and banks.
Despite this relative freedom, Iran was still struggling to find partners to ship its oil until a recent temporary insurance fix, known as “fall-back” reinsurance protection, was established to allow foreign carriers to handle Iranian oil. The fix is designed to offset any shortfall in payments from U.S. re-insurers and work around remaining restrictions. As a result, nearly a third of Iran’s shipments of crude oil are being handled by foreign vessels.
The fall-back protection does not, however, account for larger accidents such as collision and cargo liabilities, meaning that shippers must undertake a risk that, should there be an oil spill, could potentially cost billions of dollars. Reports earlier this month confirm that exports of Iranian oil have nearly reached pre-sanction levels, with about 2.5 million barrels shipping out daily.
Despite the complicated nature of the recently lifted sanctions, it appears that Iranian oil may once again be a massive contributor to international energy markets.
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