Iran putting worst impact of sanctions behind it -oil minister

Reuters Middle East

DUBAI, Dec 23 (Reuters) - Western sanctions on Iran's

shipping and energy sectors caused serious problems for its oil

industry earlier this year but Iran has mostly overcome those

challenges, Oil Minister Rostam Qasemi was quoted as saying on


Iranian officials usually play down the impact of U.S. and

European restrictions on the country's oil industry, but Qasemi

said that Iran had faced some difficulties selling its oil this


"In the month of Tir (June 21-July 21) there were difficult

conditions for the oil industry," Qasemi was quoted as saying by

Iran's state news agency IRNA.

"One of the problems was the issue of transporting oil

was not possible for any ship to enter our ports."

"On top of this, the insurance for ships carrying crude oil

was taken away ...and the import of many goods used in the

development of the oil industry was banned."

Sales dropped sharply to about 800,000 barrels per day (bpd)

in the June 21-July 21 period but recovered afterward, Mohammad

Reza Bahonar, deputy speaker of Iran's parliament, said in


The International Energy Agency estimates Iran's crude

shipments fell to multi-year lows of 1.07 million bpd in

September but rose to 1.3 million in November, remaining well

below about 2.3-2.4 million bpd last year.

The European Union imposed sanctions in July against Iran's

oil and shipping industries which barred Europe-based insurers

from covering tankers that carry Iranian oil.

New EU sanctions took effect on Saturday which add bans on

financial transactions and on sales to Iran of shipping

equipment, among other measures.

The tough measures reflect heightened concerns over Iran's

nuclear programme, which Western countries fear is aimed at

developing an atomic bomb though Iran insists the programme is


Yet Qasemi said on Sunday that Iran had managed to find ways

to rout the sanctions.

"Following on the imposition of these sanctions, for two

months we had bad conditions. With the planning that has

occurred we have nearly put this ravine behind us," Qasemi said.

"The issue of oil tankers has been solved and today we are

able to export all crude oil."

One strategy which Iran has employed to get around the ban

on European cover for vessels carrying its oil, Qasemi said, was

to establish international cover through Iranian firms such as

Kish P&I.

"Today we not only insure our own ships, we insure the ships

of other countries as well," Qasemi said.

Europe's so-called Protection and Indemnity (P&I) clubs

account for the majority of cover for the tanker market. These

specialist insurers dominate the market for insuring ocean going

ships against pollution and injury claims.

Kish, founded last year and dependent on reinsurance from a

state-run body to cover liabilities, is a newly created player

modelled on the P&I clubs.

Analysts say one potential drawback for vessels insured by

Kish is that it may struggle to pay claims outside Iran because

the sanctions prevent banks from channeling cash out of the


Iran has said in the past it has allocated billions of

dollars to insure its own oil tankers.

(Reporting by Yeganeh Torbati; editing by Jason Neely)

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