NITC Will Not Cut Transport Costs

NITC Will Not Cut Transport CostsNITC Will Not Cut Transport Costs

The National Iranian Tanker Company (NITC) does not intend to reduce the transport prices for its large fleet of oil tankers, Mehr news agency quoted Hojatollah Seyyedan, financial manager of the NITC as saying.

Despite plummeting oil prices, sea transportation costs in global markets have not declined, as oil transport costs are not directly linked to global oil prices. Rather, they are dependant mostly on supply and demand mechanisms.

During the past 10 days oil prices dropped $7-8, yet the demand for oil remained high, so to reflect this, the transport costs remained unaffected, Seyyedan explained.

NITC's turnover in the current year has shown a profit, the official stated. "In view of the recent sanctions relief, NITC profits are expected to surge."

An interim accord signed last November has provided Iran with some sanctions relief, helping to boost oil sales. However, general sanctions including the restrictions on shipping and insurance have remained intact.

Iran and world powers are trying to forge a nuclear deal before a Nov. 24 deadline.

With a fleet of 37 supertankers, which can typically carry about 2 million barrels of oil, and 14 smaller tankers NITC has an overall carrying capacity of around 86 million barrels of oil and has played a crucial role in keeping Iran's exports flowing to buyers, especially in Asia. The company operates the largest tanker fleet in the Middle East.

  EU Sanctions Lifted

European Union sanctions on National Iranian Tanker Company (NITC) have been annulled after the EU failed to appeal against a court ruling that ordered the measures to be lifted, the shipping company said on Tuesday.

An EU official told Reuters the European Union was working to resolve the issue, adding: "The time for appeal had elapsed, but work is still ongoing on remedial action for maintaining the entity on the list."

NITC had contested the EU's blacklisting, arguing that the firm is privately owned by Iranian pension funds. It has denied any links with the Iranian government or with the Revolutionary Guards.

The sanctions imposed in 2012 over Tehran's disputed nuclear program  prohibited any trade between the EU, its companies and citizens, and NITC, including the provision of services such as insurance or banking.

In July the Luxembourg-based General Court, the second-highest court in the EU, ruled there were no grounds to blacklist NITC in the bloc. Evidence provided by NITC showed that the Iranian government has no ownership stake in, or control over, the company. Full ownership is equally divided between three pension funds — the State Pension Fund, the Social Security Retirement Fund and the National Iranian Oil Co (NOIC) Pension and Savings Fund.

Rulings are typically suspended for two months pending appeals.

  Resuming Normal Business

"We are relieved to see the lifting of these sanctions. We have always enjoyed good business relationships with our EU partners and look forward to resuming those now that this difficult period has come to an end," NITC managing director Ali Akbar Safaei said, adding: "NITC's policy is to have a strong presence in the international oil transport industry."

The ruling could help NITC resume contacts and relations with European counterparts including shipping firms as well as access to potential blocked assets in the bloc.

However the company still remains on the US government's sanctions list. Shipping and insurance officials have said this will mean the company will still struggle to secure international insurance cover given the restrictions.

Banks and other service providers may also be unlikely to risk any exposure which could threaten access to bigger US markets.

In a statement issued last Friday, the British Treasury said NITC was no longer subject to an asset freeze after the EU failed to appeal the court ruling.