John Fredriksen-controlled oil tanker shipping company Frontline Ltd. said that there are still some remaining issues related to insurance and payments for cargoes sent from Iran, which could be resolved in two or three months.
“We have not lifted anything yet,” Robert Hvide Macleod, Director and CEO of Frontline Management AS, said during a conference call, adding that “two to three months (is) our estimate,” but that their prediction is subject to change.
This could limit the country’s ability to increase its oil exports, the company said.
Prior to the sanctions being lifted, Iran had a production of about 2.8 million barrels a day, of which about 1.8 million was used by the country’s refineries, leaving a million barrels per day for export.
Frontline estimates that, with the country’s post-sanctions production, there is about 1.5 to 2 million barrels per day available for export.
Iranian tankers have been holding oil cargo due to the country’s lack of land facilities. Frontline expects that the chartering requirements from Iran could increase, and Macleod said that once the insurance issue is resolved, Iran would rely more on international shipping.
Namely, in mid-February Iran loaded its first oil cargo since the lifting of economic sanctions in early January, when three oil tankers belonging to European firms from France, Spain and Russia, arrived in Kharg oil terminal on February 14, after four years of suspension due to the imposed sanctions on the country’s energy sector.
However, a number of uncertainties remain before Iran returns to the market in full scale. These are mostly related to necessary investments of USD 200 billion, which would go into modernization works of the country’s existing oil infrastructures.
World Maritime News Staff