Iran's sea trade buckles under Western sanctions

Fri Oct 12, 2012 4:45am EDT
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By Jonathan Saul

LONDON (Reuters) - Iran's vital seaborne trade is buckling under the weight of Western sanctions, deepening hardship for a population deprived of basic imports and heaping intense pressure on Tehran over its nuclear program.

Many of Iran's imports, including food and consumer goods, arrive on container, bulker and other ships, but the number of vessels calling at its ports has dived by more than half this year as the United States and European Union tighten the screws.

Analysts doubt the Iranian economy is near collapse, even though its rial currency has plunged in the last few weeks, but they say some shortages and rising prices of imported goods could provoke public unrest directed at Tehran's leadership.

A growing number of Western companies, especially those in shipping and related businesses, are pulling out of trade with Iran due to the complexities of deals and tougher banking restrictions as the sanctions take hold - and out of fear of losing business elsewhere.

"Iran's commercial shipping sector has suffered a significant hit," said Anthony Skinner of risk analysts Maplecroft.

"Although U.S. and EU sanctions do not target food shipments, importers struggle to acquire letters of credit and transfer funds. I expect current sanctions and the further tightening EU sanctions to sour the appetite of the international commercial shipping sector further."

The United States and the EU have led the sanctions push, hoping to force Iran to halt its nuclear program which they suspect is aimed at making weapons. Tehran says the work is peaceful, but the trade measures are hurting shipping badly.

Data from maritime intelligence publisher IHS Fairplay showed the overall number of vessels calling at Iranian ports in the year to early October was 980. That figure for more than three quarters of this year compares with 2,740 ships for the whole of 2011 and 3,407 for 2010.   Continued...

A ship docks at the Bandar Imam Khomeini port in Khuzestan province,1032 km (641 miles) southwest of Tehran, September 28, 2011. REUTERS/Raheb Homavandi