Wednesday , September 19 2018

Britain backs deal … Japan to halt oil

INDIA LETS STATE REFINERS USE IRAN TANKERS, INSURANCE

TEHRAN, Sept 3, (Agencies): British Minister of State for Middle East and North Africa Alistair Burt Sunday called on European companies to continue their work and investments in Iran, and to overcome technical obstacles facing economic cooperation between the two sides.

“We are seeking to remove the technical obstacles of economic cooperation with Iran and we urge European companies to continue their activities in this country,” Burt noted during a meeting with the head of Iran’s National Security and Foreign Policy Committee Falahatpisheh, according to Iranian official media.

Burt reiterated support of the nuclear agreement as an “important document” for further cooperation between Iran and Europe, saying that “we look forward to maintaining this agreement away from US policies” in this regard. For his part, Falahatpisheh called for Europe to facilitate banking cooperation between the two sides and support continuation of Iranian oil exports and to stimulate European companies to deal with Tehran.

Tehran has not resorted after US withdrawal from the nuclear agreement to “hasty and emotional” decisions but through cooperation with the other parties to pursue ways to continue this agreement, he added. Burt is visiting Tehran to participate in a new round of bilateral talks on economic cooperation following the withdrawal of the US from the nuclear agreement last May. Japan’s major oil wholesalers are meanwhile preparing to suspend crude oil imports from Iran in October, amid fears Washington will sanction countries importing Iranian crude, local media reported.

US President Donald Trump in May pulled out of a 2015 nuclear deal with Iran and last month began reimposing sanctions that block other countries from trading with Iran. A second phase of sanctions targeting Iran’s crucial oil industry and banking sector will be reinstated on Nov 5.

Japan has been seeking a waiver that would allow it to continue importing Iranian oil, but it appears unlikely to win one, Jiji Press Agency and other local media reported in recent days. As a result, Japanese oil companies are preparing to halt imports of Iranian crude and researching ways to increase imports from elsewhere to make up the shortfall, the reports said.

A trade ministry official on Monday confirmed Japan had raised the issue of a waiver in talks with the US but declined to comment further. Oil importers declined to confirm they were contingency planning for a halt in Iranian imports. “We’ve been saying we will observe a government decision (on Iranian oil imports), but we can’t comment further as we don’t disclose information on individual trades,” a spokeswoman for wholesaler Showa Shell Sekiyu told AFP on Monday. Wholesaler JXTG also declined to confirm the report. Resource-poor Japan relies heavily on imports of oil from the Middle East, though crude from Iran accounted for just 5.3 percent of the country’s total imports last year.

Iran tankers
India is allowing state refiners to import Iranian oil with Tehran arranging tankers and insurance after firms including the country’s top shipper Shipping Corp of India (SCI) halted voyages to Iran due to US sanctions, sources said. New Delhi’s attempt to keep Iranian oil flowing mirrors a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC).

The moves by the two top buyers of Iranian crude indicate that the Islamic Republic may not be fully cut off from global oil markets from November, when US sanctions against Tehran’s petroleum sector are due to start. “We have the same situation (as most Western shippers) because there is no cover, so we cannot go (to Iran),” an SCI official told Reuters.

New Delhi turned to the NITC fleet after most insurers and reinsurers had begun winding down services for Iran, wanting to avoid falling foul of the sanctions given their large exposure to the United States. SCI had a contract until August to import Iranian oil for Mangalore Refinery and Petrochemicals Ltd (MRPL), two sources familiar with the matter said. Eurotankers, which had a deal with MRPL to import two Iranian oil cargoes every month, has also said it cannot undertake Iranian voyages from September, the sources said. The sources spoke on condition of anonymity as they were not allowed to talk to the media about commercial deals. “The shipping ministry has given refiners permission to buy Iranian oil on a CIF (cost, insurance and freight) basis,” a government source said.

Under a CIF arrangement, Iran would provide shipping and insurance, enabling Indian refiners to continue purchases of the country’s oil despite the non-availability of cover from Western insurers due to the restrictions imposed by Washington. The move would benefit Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and MRPL, which plan to lift Iranian cargoes during the rest of the fiscal year ending on March 31.

India wants to continue buying oil from OPEC member Iran as Tehran is offering almost free shipping and an extended credit period. State refiners, which drove India’s July imports of Iranian oil to a record 768,000 barrels per day, had planned to nearly double oil imports from Iran in 2018/19.

Unlike their private peers, India’s state-run refiners need government permission to import oil on a delivered, or CIF, basis. Federal policy requires them to favour Indian insurers and shippers by buying only on a free on board (FOB) basis.

The permission for CIF purchases applies only to existing annual contracts with Iran, the government source said. India, Iran’s top oil client after China, will finalise its strategy on crude purchases from Tehran after a meeting with top US officials this week, a senior government official told Reuters last week. SCI, Eurotankers, the shipping ministry, MRPL, IOC and BPCL did not respond to Reuters emails seeking comment.

Iranian military assets
Israel signalled on Monday that it could attack suspected Iranian military assets in Iraq, as it has done with scores of air strikes in war-torn Syria. Citing Iranian, Iraqi and Western sources, Reuters reported last week that Iran had transferred short-range ballistic missiles to Shi’ite allies in Iraq in recent months. Tehran and Baghdad formally denied that report. Israel sees in Iran’s regional expansion an attempt to open up new fronts against it. Israel has repeatedly launched attacks in Syria to prevent any entrenchment of Iranian forces helping Damascus in the war. “We are certainly monitoring everything that is happening in Syria and, regarding Iranian threats, we are not limiting ourselves just to Syrian territory. This also needs to be clear,” Defence Minister Avigdor Lieberman told a conference hosted and aired live by the Israel Television News Company.

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