U.S. sanctions imposed on Iran will sure need a several month period in order to take effect. However, global shipping operators have already started their withdrawal from the big oil-exporter, The Wall Street Journal informed.
Denmark’s Maersk Line and Swiss-based Mediterranean Shipping Co., two of the world’s biggest shipping lines, issued statements in which they announce their reduction of general cargo shipments, while tanker owners said they are preparing to relocate their vessels to other oil-producing countries in the Middle East or West Africa.
“I don’t think any shipping line that operates globally will be able to do business in Iran if the sanctions arrive in full force, the way they are intended,” said Soren Skou, Maersk’s chief executive.
Maersk and MSC have been moving everything from electronics and household goods to food and heavy machinery to Iran. Skou said Maersk’s Iran operations are small, but with an Iranian population of 80 million, carriers heralded the lifting of earlier sanctions in 2016 as the opening of an important Middle East trade destination.
The Trump administration ordered the industry to curb operations in Iran until early November. Additionally, the sanctions will have a great impact on the ship-insurance premiums, lines of credit for moving cargo, and ship-fuel suppliers.
Removing Iran from the service map for crude carriers will immensely affect the world’s tanker operators. Shipowners in this area of work have suffered from a surplus of global capacity and now will see the world’s fifth-biggest oil producer left out from their market. Five percent of the global output comes from Iran and the majority of Iran’s oil finds its way to China, Japan, India and South Korea.
Shipowners in China, which account for purchasing around 650,000 barrels of Iranian crude a day, claimed that they expect Iran’s overall daily crude shipments to decrease by more than half.
“We won’t dare to risk any violations as we also have a bulk of our business involving shipping oil between the U.S. to the Far East,” said a senior executive of a China state-owned oil-shipping major who asked not to be named. “What concerns us is that our ships won’t be able to sail to the U.S.”