Iran Oil Tanker Firm Still Faces Sanctions

Posted by Michelle Howard
Monday, July 14, 2014

Iran's main oil tanker firm NITC will struggle for some time to call at European ports, get foreign insurance and overcome obstacles under western sanctions, even after a top court has annulled its blacklisted status in the European Union.


An interim deal between Iran and world powers signed in November has provided the Islamic Republic with some sanctions relief, helping to boost oil sales. But continued restrictions on shipping and insurance have meant that a return to Tehran's pre-sanction export level of over 2 million barrels per day (bpd) is still some way off.

The European court ruling "will not give them carte blanche to transport cargos," said Andrew Bardot, executive officer of the International Group of P&I clubs, an association whose members insure the majority of the world's tanker fleet.

NITC, sanctioned by both the European Union and the United States, contested the EU's 2012 blacklisting designation, arguing that the firm is privately owned by Iranian pension funds, whose beneficial owners are pensioners. It has denied any links with the government or with the Revolutionary Guards.

The Luxembourg-based General Court, the second-highest court in the EU, said in a ruling delivered on July 3 that there was not "the slightest evidence capable of supporting" claims by the Council of the European Union that NITC was controlled by the government of Iran or that it provided financial support to the state via its shareholders. The court upheld NITC's plea that the European Union had made a "manifest error of assessment".

"It follows that there is no justification for the listing of the applicant," the ruling said, ordering the EU to pay NITC's court costs.

The court said, however, that its ruling would be suspended pending the expiry of the period for any appeal to be lodged. Rulings are typically suspended for two months pending appeals.

EU officials did not respond to requests for comment.

Over the past few years NITC has frequently changed the names of its vessels and their flags to conceal its activity.

NITC Managing Director Ali Akbar Safa'ie has been quoted by Iranian media in recent days as saying he hoped the firm would be able to return to European markets.

Oil Shipping Lifeline
When contacted by Reuters, a senior NITC official said: "Everything is going positively for us. We have said from the very beginning that we are a legitimate company. So I hope it (the court ruling) will work in our favour."

With a fleet of 37 supertankers and 14 smaller tankers, NITC has an overall carrying capacity of around 86 million barrels of oil and has played a crucial role in keeping Iran's exports flowing to buyers, especially in Asia.

Shipping industry sources said it was premature to expect NITC to reap any major gains, given that the carrier is still sanctioned by the United States and that the EU court ruling may be appealed.

"This will have no effect as long as the status quo continues. This means NITC will continue to transport oil sold cheaply and offload it in places like Asia including by ship-to-ship transfers on to other vessels. They are still experiencing some difficulties," one shipping industry source said.

"When the full fleet comes back, it will have a big impact as you will have millions of deadweight tonnes back on the international tanker market. If we assume there will be a nuclear deal with Iran, we are still talking 12 to 18 months before NITC is fully back."

Iran and the United States, France, Germany, Britain, Russia and China aim to reach a long-term deal by a July 20 deadline. Many diplomats and analysts say, however, that an extension may be needed in view of the wide gaps in negotiating positions.

Even if they meet the July 20 deadline, it is likely to take months to renegotiate trade contracts with shipping partners and brokers as well as secure international insurance cover, given that policies are typically renewed every year in February.

Under the interim agreement signed in November, which came into effect in January, Iran's exports should average 1 million bpd through to July 20. They have been above that level for several months now.

The accord included an easing on restrictions on ship insurance and allowed for less difficult shipping of oil that the OPEC member was permitted to sell to mainly Asian buyers.

But NITC is still unable to secure ship insurance from top providers in the West. Specialist protection and indemnity (P&I) insurers, mutually owned by shipping lines, dominate the market for insuring ocean-going vessels against pollution and injury claims, the biggest costs when a tanker sinks.

"The International Group clubs have not been providing P&I cover to shipowners engaging in the temporarily permitted Iranian trade due to the lack of confirmation from the EU/US that cover will be able to respond beyond the expiry of the six-month temporary suspension measures on 20 July," Bardot said.

NITC still will be hampered by western banking restrictions on the financing of cargoes as Iranian banks struggle to trade with their international banking counterparts.

"European financial institutions are still reluctant to use (Iranian) banks that have been successful in getting off the EU list through law suits," said a former U.S. Treasury official now working in the private sector and dealing with sanctions.

"I would expect the European financial institutions would say, from an anti-money-laundering risk perspective, they are still not ready to do the business. This would include NITC."

(By Jonathan Saulediting by Jane Baird)

Maritime Reporter January 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

GTT to Exhibit at Euromaritime

Gaztransport & Technigaz (GTT), a designer of membrane containment systems for the maritime transportation and storage of liquefied natural gas (LNG), will exhibit at Euromaritime,

WCI to Honor Sens. Alexander and Vitter

Waterways Council, Inc. (WCI) to honor Senator Lamar Alexander and Senator David Vitter with Leadership Service Awards; Washington Meetings and Waterways Seminar

Crowley Awards Scholarships to SUNY Maritime Students

Crowley Maritime Corporation’s 2014 Thomas B. Crowley Sr. Memorial Scholarships have helped to further educational opportunities for three students of State University

Tanker Trends

Bomb Threat Cut Lithuania LNG Terminal Output

Gas supply from Lithuania's liquefied natural gas (LNG) import terminal was interrupted on Wednesday due to a bomb threat that later turned out to be a hoax, the

NewLead Holdings Acquire 5 Vessels

NewLead Holdings Ltd. announced today that it recently added five bitumen tanker vessels to its fleet. The Company has expanded its fleet to 10 vessels in less

AsiaBio Buys Two Shipping Firms

Asia Bioenergy Technologies Bhd's (AsiaBio) has signed a heads of agreement (HOA) with Hoe Leong Corp Ltd (HCL), Sumatec and Reachmont Logistics Sdn Bhd (RLSB)

Finance

Denmark's Budget Gap May Flirt with EU Limit if Oil Stays at $50

Denmark's government estimates its budget would lose 7.5 billion Danish crowns ($1.1 billion) if oil prices remained around $50 a barrel, according to a document

Sweden-Poland Maritime Link Improved

The EU's TEN-T Program will co-fund with over €2 million the development of the sea ports of Trelleborg (Sweden) and Świnoujście (Poland), to increase their competitiveness and sustainability,

West Coast Port Talks Clear Hurdle

Shipping companies and the union for 20,000 dockworkers at nearly 30 U.S. West Coast ports have cleared a major hurdle in their protracted labor talks, clinching

News

Damen Delivers Workboat to Multraship

Towage and salvage operator Multraship has taken delivery of the first of two customized Damen Stan Launch 804s vessels for its line handling and boatmen service companies in Terneuzen,

WCI to Honor Sens. Alexander and Vitter

Waterways Council, Inc. (WCI) to honor Senator Lamar Alexander and Senator David Vitter with Leadership Service Awards; Washington Meetings and Waterways Seminar

Denmark's Budget Gap May Flirt with EU Limit if Oil Stays at $50

Denmark's government estimates its budget would lose 7.5 billion Danish crowns ($1.1 billion) if oil prices remained around $50 a barrel, according to a document

Insurance

ZIM Launches Monitoring and Tracking Service

ZIM integrated shipping services has announced the launching of a new monitoring, tracking and security services package, specifically designed for valuable and

Oil Tankers are Front Line of Libya's Struggles

Crew members killed in tanker attack this month; West fears worsening violence could lead to civil war. Oil shippers face higher costs and the possible loss of insurance cover on Libyan voyages,

26-year Jail Term Sought for Concordia Master

An Italian prosecutor asked a court on Monday to sentence the captain of the Costa Concordia cruise liner to more than 26 years in jail for his role in the 2012 disaster that killed 32 people.

 
 
Maritime Careers / Shipboard Positions Naval Architecture Navigation Pipelines Port Authority Salvage Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2956 sec (3 req/sec)