Reuters: Resolving the Insurance Issue for Iranian Tankers Will Take Two to Three More Months

On Tuesday, March 2, Reuters reported, citing the director of the 'largest independent tanker company in the world,' that resolving the insurance issue for Iranian tankers will likely take another two to three months following the lifting of sanctions. The report states that this insurance problem could negatively impact the Islamic Republic's intention to significantly increase its oil exports in the near future. It adds that Iran had expected to quickly boost its crude oil exports after the lifting of international sanctions following the nuclear agreement with the P5+1 group, but it appears Iran still has to grapple with financial and insurance issues for a few more months. According to Robert McLeod, the CEO of Frontline, the largest independent tanker company in the world, based in Oslo, Norway, 'the problems persist, especially regarding insurance and payments, which continue, and we expect this situation to last for another two to three months.' The Ministry of Oil in Hassan Rouhani's government had previously announced that as soon as sanctions were lifted, the country's oil exports would increase by half a million barrels per day, with a similar increase expected in the second half of this year. In this regard, Bijan Namdar Zanganeh, the Minister of Oil, announced on Tuesday that the country's oil exports have reached 1.75 million barrels per day in the past month. During the sanctions, Iran's oil exports were just over one million barrels per day, although Iran was also exporting more than 300,000 barrels of gas condensate daily. However, Reuters writes that, based on its research, Iran's oil production has increased by a total of 200,000 barrels per day since the end of last year. The news agency further states that the main problem remains the ongoing restrictions imposed by the U.S. on companies and citizens of that country for trading with Iran. Recently, Reuters also reported that due to the lack of insurance services from American companies, Japan may be forced to halt its oil imports from Iran in March. According to Mr. McLeod, most of Iran's tankers are currently being used as floating oil storage. During the international economic sanctions, Iran stored 30 to 50 million barrels of unsold oil in large tankers at sea and is now waiting for new contracts to export these reserves. According to the Frontline CEO, once the insurance issues are resolved, Iran can rely on international tankers and implement its plan to increase crude oil exports. He stated that Iran could potentially increase its oil exports to between 1.2 to 2 million barrels per day this year.