New Managing Director of the National Iranian Tanker Company (NITC) Sirous Kianersi described latest status of oil displacement agreements between NITC and huge European oil companies saying “so far, 35 contracts have been inked with European sides for taking out leases on 35 Iranian tankers.”

The official stated that the 35 lease contracts had been signed with oil giants from various EU states like Greece, Spain, Italy and the Netherlands asserting that the deals were spot contracts which were sealed for transport of crude oil.

He highlighted that Iranian tankers enjoyed highest standards for transference of crude oil in ports and oil terminals of the European Union (EU); “so far, agreements have been signed with majority of European oil firms like Spain’s Cepsa, Italy’s Eni in addition to Greek and Dutch companies.

In view of post-JCPOA conditions and removal of restrictions, more agreements will be sealed with European oil giants for displacement of crude oil, the official reiterated.

Last week, Kianersi had reported on berthing of Iranian oil tankers at EU oil terminals stressing that the first Iranian tanker had tied up at a Spanish socking site.

For the first time ever, an Iranian tanker, which has been lent out to a large Spanish oil company, moored at Algeciras port of the European state.

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Sirous Kianersi added the first NITC tanker leased to a major Spanish oil company docked at the Port of Algeciras just recently, reported IRNA on Wednesday.

More NITC tankers are heading to other European ports, he said, adding two vessels are currently en route to the Netherlands.

NITC is the biggest tanker company in the Middle East and one of the largest in the world with a capacity of 15.5 million tons per year.

Managing Director of Iran’s Port and Maritime Organization Mohammad Saeednejad also said on Wednesday that the lifting of sanctions has allowed Iranian ships to fully resume operations to Asian, European and American ports.

Since October, Iranian VLCCs have reportedly completed 32 voyages delivering around 70 million barrels. China accounted for 13 voyages and India for 12 others.

As many as 17 international shipping lines have resumed their calls at Iranian ports which were deserted by and large during the sanctions, Saeednejad said.

Iranian VLCC fleet, which had been used as floating storage, has started to reappear on international trading routes. Since October, more than 20 NITC-operated VLCCs have returned to the market compared to just 13 in October.

Iran’s oil exports hit 2.04 million barrels per day in November, recovering from a decline of around one million barrels per day during the sanctions. Over the last 12 months, European customers have resumed lifting Iranian crude oil, with France, Spain, Greece, Italy, the Netherlands and Taiwan taking at least one shipment.

According to ship tracking data, the number of Iranian VLCCs in storage has fallen from 16 to 7 units, which equals to a reduction of 20 million barrels. As much as 15 million barrels of crude oil is estimated to remain in floating storage on NITC’s VLCCs — down from an estimated peak of between 40 and 50 million barrels.

On Tuesday, a report said global ship insurers were about to resume near full coverage for Iranian oil exports from next month without involving US-domiciled reinsurers.

Restrictions on US firms handling Iranian goods had greatly limited the number of reinsurers of cargoes, but the new arrangements, which essentially allow re-insurance of ships without the involvement of US firms, should boost the number of eligible shipments, Reuters reported.

“There will be no US-domiciled reinsurer participation on the 2017 IG reinsurance program,” the news agency quoted Andrew Bardot, secretary and executive officer at the International Group (IG) of P&I Clubs in London, as saying.

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Iran is now in more active talks with insurers to provide cover in a market valued at $9 billion overall last year and potentially double that in the next decade. The country trying to reap the benefits of last year’s nuclear deal with world powers, Reuters wrote on Friday.

Western companies need insurance in order to resume business with Iran. Shipping and trade credit insurance, which remove the risk of nonpayment for goods, are the first types of insurance being offered.

“There is generally a lower degree of fear and apprehension and that is because you have not had the big fines on the insurers that the banks have faced,” said leading London sanctions lawyer Nigel Kushner.

“We are going to see greater and quicker movement there than on the banking side, at least in London and the UK,” said Kushner, who is also a director of the British Iranian Chamber of Commerce.

As Iran has aimed to ramp up oil exports, securing marine insurance has been crucial. Top tier Western ship insurers have started offering services in recent months.

Insurances for Iranian tankers

Iran’s Deputy Oil Minister Amir Hossein Zamaninia has said European insurers now have no problems insuring Iranian oil tankers.

Protection and Indemnity (P&I) clubs – marine insurers owned by shipping firms – have started to provide cover for Iran’s shipping fleet, including its oil tankers.

Jonathan Andrews, director and head of eastern underwriting with Britain’s Steamship Mutual, said it was insuring ships for Iranian tanker operator NITC and also for Iranian cargo ship operator IRISL.

“We have a long history of insuring Iranian ship owners,” Andrews told Reuters. “We are happy to be insuring our former members again.”

Norwegian ship insurer Skuld said it was in discussions with IRISL, while it was already insuring NITC ships.

Others such as the UK’s Standard Club said they were covering vessels trading to and from Iran, but did not say whether this related to Iranian shipping firms.

Ship insurers say there are still constraints on payments, given a freeze on using the US financial system.

“Problems remain however in relation to the channeling of payments through the banking systems, both in relation to collection of premium and settlement of claims,” said Andrew Bardot, executive officer with the International Group, which represents ship insurers.

This was due to the reluctance of many banks and financial institutions to process such payments, and was now the main concern for insurers and reinsurers, he said.

“Solutions are being found, but it is a difficult process and likely to remain so for the foreseeable future.”

More transactions

US banks are forbidden to do business with Iran under domestic sanctions still in force. European banks also face problems, since transactions with Iran in dollars cannot be processed through the US financial system.

Banks remain nervous after some heavy US penalties, including a $9 billion fine on France’s BNP Paribas (BNPP.PA) in 2014, largely for violating US financial sanctions.

Despite this, European export credit agencies are guaranteeing trade finance for Western companies doing business with Iran.

Germany’s state-run export credit group Hermes has concluded trade finance deals covering goods worth several million euros.

“About a dozen transactions have been approved so far,” a Hermes spokesman said.

“The demand is there from the exporters’ side but they need a lot of information. There is a continuous and rising flow of applications (for export credit guarantees).”

Italian export credit agency SACE has also undertaken its first small transactions with Iran.

“The lingering risks should not be underestimated, however, as they might create problems … legal, documentary, operational, for companies interested in building or restoring commercial or financial relationships with local counterparties,” a SACE spokesman said.

France’s Coface has signed an agreement with Iran to guarantee trade finance on behalf of the French government.

France’s Coface has signed an agreement with Iran to guarantee trade finance on behalf of the French government. Nevertheless, major transactions were yet to be concluded due to the banking issues.

Aviation and energy are two sectors in focus, industry executives say, along with political risk cover, even if there have been few deals so far.

Christian Bieri, EMEA reinsurance head at insurance group MS Amlin, said Iran was “very much under discussion”.

“It’s very high up the agenda,” Bieri said. “It’s going to be something for 2017.”

Other large insurers and reinsurers such as Hannover Re (HNRGn.DE) are looking closely at Iran, but say concerns about payments still prevent them from doing business there.

Swiss Re (SRENH.S) chief executive Christian Mumenthaler told Reuters: “We have big business in the US and so our chief legal officer is basically regulating every micro-step we do in that direction.”

Lloyd’s of London had historically been active in Iran and chairman John Nelson said it was a “market we would like to get back into”.

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