By Dr. David Ramin, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
In mid-January, an Iranian oil tanker leased to a Spanish oil company reached Europe. It called at the Port of Algeciras in Spain two days after the one-year anniversary of the implementation of the Joint Comprehensive Plan of Action and shortly before US President Donald Trump took office on Jan. 20.
The managing director of the National Iranian Tanker Company (NITC), Sirus Kianersi, hailed the development: “Today, after resolution of insurance, classing, flagging and international certification issues for Iranian vessels, we have witnessed another JCPOA achievement for the country’s marine transportation.”
Before the nuclear deal was reached, it would have been impossible for an Iranian tanker to unload Iranian crude oil at a European port due to the EU sanctions against Iran.
Among other things, these restrictions banned European imports of Iranian crude, prevented European energy companies from entering Iran’s energy industry, cut Iran off from international banking and insurance systems and since 2012, denied the NITC access to European ports.
In several respects, the NITC’s resumption of oil deliveries to Europe is a big step forward for Tehran and a sign that the nuclear deal is working toward ending Iran’s isolation.
For instance, Iran can now finally utilize its own tankers. The country’s fleet is among the world’s largest, though rather old and thus only partially operational. Apart from the cost dimension — using its own tankers will likely be cheaper for Iran than needing to hire probably reluctant foreign services — there is also a political dimension.
Wary of engaging with Tehran even as the nuclear-related sanctions are lifted, international shipping lines as well as their insurers might take an even more cautious stance toward the country in light of potential new US sanctions targeting international firms engaged with Iran. It should be noted that in 2010, the US Treasury Department fined Danish shipping giant Maersk more than $3 million in relation to its engagements with Iran. Tehran is certainly more flexible and secure in terms of ensuring steady deliveries using its own ships.
By and large, however, the step does little to change the outlook for Iran’s energy industry. In the year since the January 2016 implementation of the nuclear deal, Iran has already achieved the maximum of what was possible in the short term. The country has steadily moved back to its pre-sanctions position in terms of crude oil production and exports, with output reaching 3.7 million barrels per day (mbpd) by the end of 2016 and exports of crude and condensate peaking at 2.6 mbpd in September — though some sources put it as high as 2.8 mbpd.