TEHRAN: Iran’s oil sector is facing massive hurdles to the transportation of oil and also insuring cargoes due to international sanctions.
Sanctions have halved Iran’s oil exports to just over 1 million barrels per day since 2012 and hammered its economy.
A complex range of restrictions has been imposed on Iran over several decades, starting with initial measures in 1979 after Iranian students stormed the U.S. embassy in Tehran.
The major oil-related sanctions have been imposed by the United States and European Union to pile pressure on Iran over its nuclear program.
EU and U.S. sanctions have blacklisted Iran’s shipping sector, including its top tanker owner NITC, meaning U.S. and European companies are prohibited with trading with it.
NITC is Iran’s main transporter of oil. The country’s top port operator Tidewater Middle East Co is also sanctioned, which has complicated shipments from export terminals.
Iran is also prohibited from securing services from international ship classification firms, which verify safety and environmental standards for vessels and key to insurance and port access for vessels.
Under an initial agreement with Iran reached in November 2013, known as the Joint Plan of Action (JPOA), and rolled over subsequently until June 30, 2015, both the U.S. and EU relaxed some measures on Iran, which allowed the Islamic Republic to have access to some of its frozen oil revenues abroad and also allowed a modest easing of oil sales to top importers including China and India.
While the JPOA had provided Iran with modest sanctions relief, including a temporary easing on insurance cover for permitted trades, ship insurers remain wary of extending cover on those trades due to concerns they may face sanctions exposure if any potential claims are made and extend after the current expiry of temporary measures on June 30, 2015.
