Industry Majors Put Their Iranian Businesses under Review
The announced reinstating of nuclear-related sanctions against Iran is already starting to kick in as the shipping industry giants led by Maersk Line and MSC start to scrutinize their business operations with Iran.
Donald Trump’s decision to unilaterally pull out from the Joint Comprehensive Plan of Action (JCPOA) and begin reimposing the sanctions was announced on May 8.
Companies that trade in U.S. dollars or have operations there cannot afford themselves to lose a share of the U.S. market, hence, they are likely to end their ties to Iran as a consequence.
A Maersk Line spokesperson told World Maritime News that it has ceased acceptance of commodities under 1.2. iii (JCPOA winddown FAQ).
“Our presence in Iran is limited. We will monitor the developments to assess any impact on our activities and keep our customers directly informed in case of any changes,” the company statement reads.
Maersk Line serves the Iranian market via a feeder service using 3rd party vessels, ensured through slot purchase agreements from Jebel Ali (UAE) to Bandar Abbas and Bushehr.
Maersk Line has offices in Tehran, Bandar Abbas and Bushehr, employing a total staff of 12.
Swiss shipping major MSC is also reviewing its business to check the impact of the sanctions.
“MSC Mediterranean Shipping Company SA closely monitors all sanctions measures introduced by the U.S. government. In consideration of the latest U.S. Presidential order on 8 May 2018 to reinstate Iran-related sanctions, MSC is reviewing its services, operations and business relationships to understand if any are impacted and will comply with the timetable set out by the U.S. government,” an MSC Spokesperson said in a statement.
The company has no direct services to Iran, however, it uses third-party feeder ships to transport cargo between Iran and Jebel Ali in the United Arab Emirates.
Commenting on the revision of operations by the two container shipping companies, Iranian port and Maritime Organization (PMO) said that the final outcome of the sanctions would depend on what Iran agrees with other parties of JCPOA. As explained, the decision of the two companies to evaluate their operations does not necessarily mean they would leave Iran.
Maersk Tankers is also planning to wind down its business by the end of the required period mandated by the U.S. Treasury.
“Maersk Tankers has been transporting cargoes for customers in and out of Iran on a limited basis. We will perform customer agreements entered into before May 8 and ensure that they are winded down by November 4, as required by the re-imposed US sanctions. We are closely monitoring developments and assessing the potential impact on our activities while staying in dialogue with our customers to inform them in case of changes,” Maersk Tankers said.
Danish tanker owner and operator Torm has also stopped taking any new cargo bookings in Iran.
“Regarding Iran sanctions, we monitor the situation closely and always follow the rules. Therefore, we do not take any new commitments on Iran,” the company said in a statement to WMN.
The tanker market, which is under extreme pressure as it is, is heading into a period of further uncertainty due to the sanctions.
Specifically, European buyers are likely to refrain from buying Iranian crude, resulting in the country’s export cuts and further reducing available volumes of oil for transport.
Iranian companies that are facing the new wave of sanctions following the 180-day wind-down period are the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates.
Sanctions will also be imposed on petroleum-related transactions with the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran, the Treasury Office informed.
Iranian energy and financial sectors are being targeted by the sanctions as well.
World Maritime News Staff