Economy, Business And Markets

A New Shipping Era for Iran

A New Shipping Era for IranA New Shipping Era for Iran

Geopolitics moved front and center as a driver to shipping, following the lifting of sanctions against Iran on January 16.

The move released roughly $100 billion of Iran’s frozen assets and reopened trade that will eventually benefit all shipping sectors, Lloyd’s List—one of the world’s oldest continuously running journals, having provided weekly shipping news in London as early as 1734—reported.

The lifting of the sanctions opened the way for Tehran’s return to the global energy market. While the deluge of additional crude in an oversupplied global market and low oil prices should support tanker demand, the real impact on rates will depend on how Iranian crude flows shape up.

New prospects for trading in liquefied natural gas have also opened up, which has the potential to become one of the world’s biggest.

Demand for dry bulk vessels will also rise, as Iran starts to invest in manufacturing and infrastructure development, lending support to a beleaguered market. However, it will take time and clarity before that impact is felt.

In container shipping, some lines had already returned to trade with the country, including lines from Asia.

Maersk Line, the world’s largest container shipping operator, is considering plans to resume services to Iran, but has not yet decided when, even though its partner Mediterranean Shipping Company has already returned. United Arab Shipping Company restarted services to and from Iran.

The port sector continued its interest in a revival of business with Iran, illustrated by news that the Port of Antwerp in Belgium would send its fourth delegation to Iran since October with the stated intent of signing a memorandum of understanding to improve business ties.

Protection and indemnity insurance clubs have also been frequent visitors to Tehran in recent weeks, as marine insurers mull their options following the lifting of sanctions that banned the provision of marine insurance services to that country’s shipowners in recent years.

However, North P&I, a leading marine mutual liability insurer, which historically provided cover for most big Iranian shipowners, has declared itself cautious about the prospects of renewing those relationships.

The lifting of sanctions freed many shipowners to return to normal trade, as the US removed 606 vessels and vessel aliases from the sanctions list, from crude oil tankers and dry bulk carriers to supply vessels.