Expert says insurers no longer willing to touch Iranian cargos

Posted on June 20, 2012

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As a result of sanctions Iranian exports are down, as insurers no longer are willing to touch Iranian cargos, Senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, James M. Dorsey said.

Countries look for alternative sources, as payment to Iran becomes more and more difficult,” Dorsey said, commenting on the sanctions continuing to affect Islamic Republic’s economy.

A European Union embargo on Iranian crude oil is set for July, but higher output from Saudi Arabia, Iraq and post-Gaddafi Libya has helped keep global supply ample, even as Iran’s customers look for alternatives to Tehran’s barrels.

Last month IEA said Iran’s oil exports have decreased from 2.5 mbd to less than 2.0 mbd, and this figure is expected to fall even further to 1.5 mbd in the second half of 2012.

The analysts see Iran’s exports slipping by only 216,000 bpd in July, and marginally thereafter. That implies a total loss of exports at close to the 1.5 million bpd level that analysts at Barclays warned could provide “significant upside to prices”, particularly with summer demand rising, Reuters reported.

Major importers had lobbied the EU to relax the ban or delay the sanctions, but the EU has been resolute: “We have a clear position starting with the oil ban on the first of July,” Energy Commissioner Guenther Oettinger said last week.

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