Iran's Shipping Activities Expected to Return to Normal by Mid-2017

The CEO of the Islamic Republic of Iran Shipping Lines said on Thursday, November 6, that he hopes to restore the volume of activities lost during international sanctions by mid-2017. International sanctions were lifted last January following the nuclear agreement reached in July last year between Iran and world powers. Mohammad Saidi, CEO of Iran's shipping organization, told Reuters on the sidelines of the Danish Maritime Forum: "Since then, problems have been gradually resolved, and many restrictions and difficulties have been lifted. I believe that by mid-2017, everything will return to normal." He expressed hope that after the U.S. presidential elections in November, restrictions on transactions in dollars would also be lifted. Mr. Saidi added: "This is one of the commitments of the U.S. under the agreement signed last January. This is one of the U.S.'s definite commitments." Reuters reminds that according to other U.S. government sanctions, banks in that country still do not have the right to conduct direct transactions with Iran. European banks are also limited in trading with Iran due to the prohibition of using dollars and the U.S. financial market. Affected by the decline in global trade and the saturation of maritime transport with the arrival of more ships, maritime transport currently has a poor market, but Mr. Saidi says that as a result of the lifting of international sanctions, Iran's shipping lines will expand their operations with 156 ships. He added: "We are negotiating with several shipbuilding centers and hope to reach results in the coming months." The recession in the shipping industry has caused one of the major shipping companies, the South Korean company Hanjin, to cease operations, and as a result, the transfer of shipments worth $14 billion has been halted. Mr. Saidi said that the cessation of this South Korean company's activities has created a good market for Iran's shipping lines, and "now Hanjin's customers are coming to us for transferring their shipments from South Korea and China to Iran." Reuters adds that according to Mohammad Saidi's predictions, trade between Iran and Europe will significantly increase next year. He stated, "The Islamic Republic of Iran will increase the export of oil and petrochemical products and, in return, will import heavy machinery, power plant equipment, and new technologies from European countries." Overall, his assessment is that the maritime transport market will be challenging but positive in the coming years. He added: "We are facing challenges. The saturation of the maritime transport industry with many ships is one of these challenges. Low prices and small shipment volumes are another challenge. But overall, I am optimistic." He declined to comment on the possibility of the Islamic Republic of Iran Shipping Lines purchasing shares of the South Korean company Hanjin and added that the merger plan of two major shipping companies, Hapag-Lloyd and UASC, will not add to the current pressures in reducing the volume of maritime transport in the Persian Gulf region. "They have their capabilities, and we also have our capabilities and facilities. This issue does not create a challenge for us." The Islamic Republic of Iran Shipping Lines is negotiating with Asian banks for investment and borrowing but will also welcome proposals from European banks. Mr. Saidi said: "Before the sanctions were implemented, our relationship with European banks was very good, and they invested in multiple projects. But after the sanctions, there has been no news from them."