NIOC Hunting for Ships to Keep Exporting Oil

National Iranian Oil Company is discreetly scouring the globe for second-hand oil tankers to replace its ageing fleet and keep crucial crude exports flowing as US sanctions start to bite, Iranian and western sources said.

Since US President Donald Trump re-imposed sanctions in November, exploratory talks with South Korea for up to 10 new supertankers have stalled, Panama has removed at least 21 Iranian tankers from its registry and Tehran is now looking for extra vessels in places such as Vietnam, the sources said, Reuters reported.

Washington has put restrictions on Iran’s port, energy and shipping sectors but it has given waivers to the country’s eight biggest oil customers, which include China, India and Japan, so they can keep buying Iranian crude.

With oil exports accounting for an estimated 70% of Iran’s revenue, maintaining an effective fleet of tankers to store and move that oil is crucial for Tehran.

But potential sellers of used vessels are more wary this time round after a Greek network that helped Iran buy tankers under previous sanctions was blacklisted. Western insurers are also steering clear, complicating Iran’s attempts to export crude to US-approved buyers.

If Iran runs into difficulties exporting its oil it could have a significant impact. Besides the importance of oil for its budget, Iran is estimated to produce about 2.8 million barrels a day, more than 9% of OPEC’s output.

"Whatever sector you look at, companies will keep in mind being cut off from the US financial system when deciding whether to trade with Iran," said Mehdi Varzi, an independent oil consultant who has previously worked at the state-run NIOC.

source: Financial Tribune