Japan Crude Tanker Signals Iran After International Absence

Iran’s largest crude-export terminal is poised to receive its first internationally owned tanker in a month, ending an absence caused by European Union curbs on insuring ships that extended to almost all the fleet.

The Ryuho Maru, now insured by the Japanese state, will arrive at Kharg Island tomorrow, according to ship-tracking data compiled by Bloomberg. The signals are entered by vessels’ captains. A non-Iranian tanker last called on June 19. All tankers calling since then have been operated by Tehran-based NITC. It was the first such four-week period since at least the start of the year, when the only vessels to go to Kharg Island were controlled by NITC.

The ban by the 27-nation EU extends to insuring vessels carrying Iranian oil, and the concentration of the maritime-insurance industry in London means the curbs apply to almost all tankers. NITC has too few carriers to haul all of Iran’s exports, according to Dahlman Rose & Co., an investment bank in New York. Shipments by OPEC’s second-biggest producer are at 1 million barrels a day or less, more than 50 percent below last year’s average, Barclays Plc estimates.

“This is a good indicator of how effective the European embargo has been in impacting Iranian crude exports, especially on the shipping-insurance front,” Miswin Mahesh, a London-based commodities analyst at Barclays who has been tracking Iranian oil flows since the ban began, said by e-mail today. “It also suggests Iran’s own fleet is now close to full utilization.”

NITC Blocked

Twenty-six of 39 NITC tankers tracked by Bloomberg signaled destinations in the past week, compared with 25 that did so in the same period to July 11, according to data compiled by Bloomberg. Fourteen of the 26 are bound for Iranian ports, three for China, two for Egypt and two more for India.

The U.S. Treasury Department said July 12 it would block transactions through the country’s financial system involving NITC and 27 affiliated entities. Government-linked NITC is trying to evade sanctions by repainting or reflagging its ships and disabling tracking gear, the Treasury said in a statement.

India, Iran’s third-largest buyer, asked the Persian Gulf country to arrange to transport and insure its cargoes. Iran offered to do the same for South Korea after the Asian nation said it would have to halt shipments because of Western sanctions. China’s largest ship owner said it lacks government guarantees to ship Iranian oil, Lloyd’s List reported today.

Insurance Terminations

The Ryuho Maru, owned by Tokyo-based Iino Kaiun Kaisha Ltd., will load about 1.7 million barrels of crude, three officials from refiners and Japan’s trade ministry said last week. A person who answered a call to the company’s investor-relations department outside normal office hours said no one was available to comment.

Oil tankers are losing insurance because of EU sanctions against Iran, according to Andrew Bardot, secretary and executive officer of the International Group of P&I Clubs, whose members cover 95 percent of the global fleet of the ships.

Some vessels had their coverage “terminated” as a result of the EU embargo that took effect July 1, Bardot said by e-mail today, declining to elaborate. The group’s 13 members, who follow EU law, covered all but 5 percent of the world’s tankers against risks such as spills and collisions before the sanctions began.

International Group members stopped covering shipments from Iran after the EU banned the purchase, transportation, financing and insuring of the nation’s crude. Burning ship fuel made from Iranian oil could also infringe the ban.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE