Frontline: Iran Oil Shipping Insurance Months Away

Frontline: Iran Oil Shipping Insurance Months AwayFrontline: Iran Oil Shipping Insurance Months Away

Frontline, one of the world's largest independent tanker firms, says securing insurance for cargoes carrying oil from Iran is likely to take another two to three months, potentially limiting Iran's ability to quickly ramp up oil exports.

Iran has been seeking to rapidly increase oil exports since international sanctions were lifted as part of its nuclear deal with world powers, which came into effect in January, but it still faces insurance and financing hurdles, Reuters reported.

"We have not lifted anything yet, there are still terms of insurance and payments. There are still some outstanding issues, but we expect that to be in place within two to three months," said Robert Hvide Macleod, chief executive of Oslo-listed Frontline.

"That could change, but two to three months is our estimate," he told a conference call with investors on Monday.

The United States still prohibits US individuals or companies from trading with Iran and insurers are trying to clarify details on the parameters of the US sanctions.

"In terms of volumes, Iran's pre-sanctions levels were 2.8 million barrels of oil per day. Their domestic refineries consumed about 1.8 million bpd," MacLeod said.

"There is a million left to export which they did on their own ships. Now the post-sanctions volumes available into 2016 look to be between 1.5 million and 2 million barrels."

MacLeod said once the insurance issue is resolved, Iran would rely more on international shipping.

"Iranian tankers have been holding unsold oil at Iranian ports and will continue to do so due to a lack of land storage facilities," he said.

"We expect the chartering requirement from Iran to increase and for them to fix international tonnage."