The crude market has had an interesting subplot playing out since the announcement that western nations are preparing themselves for the implementation of strict sanctions against Iran, t
he second-largest crude supplier in the Organization of the Petroleum Exporting Countries (OPEC).
Last week it was
that Chinese shipyards are expected to deliver the first of twelve supertankers to Iranian oil shipping operator NITC in May, two months ahead of a European ban that will make it difficult for the majority of the world's fleet to carry the oil giant's supplies.
, formerly known as the National Iranian Tanker Company, was privatized in 2000 and is now owned by three Iranian pension funds. It operates a fleet of 39 vessels, including 25 very large crude carriers (VLCCs), and is one of the world's largest crude oil transporters.
Tankers "carrying more weight"
Industry executives stated that another seven VLCCs are scheduled for delivery by the end of this year, and the remaining four are expected to be commissioned by the end of 2013. The tankers are set to add much-needed capacity to NITC's fleet at a pivotal time when the number of maritime firms willing to transport Iranian crude has plunged on the back of tightening sanctions.
"These new tankers now carry more weight in this sanction environment," a Beijing-based oil executive recently told Reuters.
Sanctions will see the
(EU) prohibit European insurers and reinsurers from indemnifying tankers carrying Iranian crude anywhere in the world starting in July, which many analysts feel will threaten shipments and raise costs for major crude buyers including the likes of China, India, Japan, and South Korea.
Europe has traditionally been among the largest buyers of Iranian crude, but is now trying to replace it with fuel from other sources. Japan and South Korea are also attempting to reduce imports from Iran, although unlike the EU they have not set a deadline for doing so.