Just over a month ago the US Treasury Department threatened sanctions against any country allowing crude oil tankers belonging to Iran's National Iranian Tanker Company to be registered (flagged) with that country. Tanzania and the Pacific-island republic of Tuvalu got the message.
The Financial Times reports that the two countries will soon de-list any tankers belonging to Iran's state-owned company - also renamed to NITC. The action will force Iran to find another registry for the 2-million-barrel capacity crude carriers.
Iran's problem is that without a flag the carrier cannot be insured and without insurance the carrier cannot sail. That jeopardizes Iran's crude contracts with China, India, Japan, and, as of next month, South Korea. The receiving country cannot use its own vessels for the same reasons.
Iran's troubles could multiply if President Obama heeds the advice of several legislators who want him to impose sanctions on any country that provides a flag of convenience to Iran. If that were to happen, then Iran would have no choice but to flag its own ships which would make them nearly impossible to use to carry the country's crude.
Filed under: 24/7 Wall St. Wire, International Markets, Oil & Gas Tagged: featured