Iran Finds New Revenue Source, Leases Out Oil Tankers

Whatever some say about the global oil glut easing, there's still ample demand for floating storage, and Iran is in on the deal. A source from the National Iranian Oil Tanker Company said today the firm has leased five vessels to international oil companies. Ali Akbar Akhund Kazami added that "continuous negotiations are held between NIOTC and various companies though domestic needs remain as top priority."

Iranian vessels will sail to Europe and Asia, even though there are still some issues around the leasing of tankers that are being addressed at the moment. These include insurance of the vessels and the cargo from international insurers, certification from classification organizations, the approval of global oil companies, and NIOTC staff training to be able to respond to the higher demand for Iranian tankers.

Kazemi, who is the head of NIOTC's rental office, was also quoted by Mehr news agency as saying the market at the moment was particularly favorable because of the growing demand for crude from Indian and Chinese refiners. He added that international oil companies are "willing to resume cooperation with NIOTC."

Iran has been eager to get back on the international oil stage after economic sanctions imposed on the country because of its nuclear program were lifted early this year. Production has been ramped up significantly, reaching 3.6 million barrels last month. Exports are also on a steady rise, doubling between January and June.

Iran is also working to attract international oil majors to its oilfields, its leading move in this direction being the devising of a new petroleum contract (IPC), to replace the old buyback scheme that saw foreign operators leave the country with a sigh or relief after barely meeting the breakeven point or even posting losses. The last update in this respect is that the first IPCs should be signed within three to four months.

By Irina Slav For Oilprice.com

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