NITC Enters Foreign Leasing Contracts

NITC Enters Foreign Leasing ContractsNITC Enters Foreign Leasing Contracts

Iran has leased 12 oil tankers to foreign companies and plans call for leasing more vessels in the current Iranian fiscal year that ends next March, managing director of National Iranian Tanker Company said on Sunday.

“As more international companies have shown interest in renting Iranian tankers, measures have been taken for Iranian vessels to reenter the world markets via foreign contractors,” Ali Akbar Safaei was quoted as saying by Shana.

According to the official, the company leased five oil tankers to foreign companies after the easing of the international sanctions in January.

"All Iranian tankers carry cargo under the certification of the international classification institute Lloyd's Register. In addition, they are all covered by international insurance firms," he noted.

Lloyd’s Register is a global engineering, technical and business services organization wholly owned by the Lloyd’s Register Foundation, a UK charity dedicated to research and education in science and engineering.

Ship classification is the process of detailing technical aspects of vessels by international institutions that allow them to dock in many ports and terminals and sail in international waters with ease.

NITC has expanded its fleet to 69 tankers and very large crude carriers with a total capacity of 15.5 million tons.

"Facing economic crises during the oil industry's nationalization era as well as suffering other hardships led to the birth of an independent tanker fleet to have a say in international markets," he noted, adding that being a key player in oil transportation can help Iran not only play a bigger role in global markets but also handle oil shipments in critical conditions, such as the snapback of sanctions.

  Spare Capacity

According to Ali-Akbar Kazemi, head of the leasing department at NITC, the majority of Iran's tanker fleet is used by the National Iranian Oil Company for crude oil export, yet NITC leases ships to both domestic and foreign companies when the state-owned NIOC does not need its tanker fleet.

"Multinationals have a positive approach to resuming relations with the NITC. But they're also waiting for stable financial conditions," Kazemi noted.

NITC, which owns the world's largest tanker fleet, is taking steps to close in on international operating standards and register its vessels with major global institutions.

Reportedly, Iran has 42 VLCCs, nine Suezmaxes, five Aframaxes and several other ships, with the fleet’s average age at around 8.5 years. NITC operates one of the world's largest tanker fleet ahead of regional rival Saudi Arabia as well as Qatar, Oman and the UAE, according to the United Nations' 2015 Maritime Transport report.

According to Nassrollah Sardashti, NIOC's director for commercial affairs, leasing an oil vessel cost $25,000-30,000 in 2014, but prices jumped 80% in 2015.  

The official also noted that the slump in crude prices over the past 24 months has led to massive layoffs across the oil industry, as major international producers become insolvent or are filing for bankruptcy, but shipping companies have been largely spared from the oil crisis.

According to reports, oil shipping accounts for nearly a third of global maritime trade, with the Strait of Hormoz in the Persian Gulf being one of the world's strategic sea lanes.