Gasoline cargoes sail to Iran, crude exports still tough

Wed Jan 27, 2016 1:19pm EST
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By Dmitry Zhdannikov

LONDON (Reuters) - Major oil firms and trade houses are gradually resuming energy trading with Iran but efforts remain very cautious and often face huge legal obstacles, meaning a post-sanctions return to full-scale activity will take weeks if not months.

Trading sources told Reuters major trading houses Gunvor and Vitol have each delivered several cargoes of gasoline into Iran in recent days. Gunvor and Vitol declined to comment.

Meanwhile, Swiss trading house Litasco of Russian oil major Lukoil (LKOH.MM: Quote) had to cancel a booking of a tanker to transport oil from Iran to Italy in early February due to what trading sources described as ship insurance difficulties.

Trading sources on Wednesday cited preliminary fixtures being made by Glencore (GLEN.L: Quote) and Total (TOTF.PA: Quote) for tankers to lift Iranian crude in February although it was still unclear if the deals had been concluded partly due to insurance issues.

"It is still very difficult despite the sanctions removal. Dollar clearing is an issue, banks' letters of credit is an issue, ship insurance is an issue. Loads of people are still very cautious," said a senior trading executive.

A source from Iran's state oil firm NIOC said Litasco, Cepsa and Total were all seeking to buy crude cargoes but some deals had yet to be finalised and ships had to be found. In Asia - Japan, Taiwan and India have all asked for more crude than their usual purchases prior to the lifting of sanctions, he added.

Leading shipping players say efforts by Iran to start exporting oil to Europe are being held up as tanker owners are still struggling to secure insurance for cargoes.

A nuclear deal between world powers and Iran earlier this month led to the removal of European sanctions on the country.   Continued...

Iran President Hassan Rouhani (L) shakes hands with Italian Prime Minister Matteo Renzi at the Campidoglio palace in Rome, Italy, January 25, 2016.  REUTERS/Alessandro Bianchi