Jul 23 2012 |
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South Korea Considers Offer To Use NITC Tankers For Imports
South Korea Considers Offer To Use NITC Tankers For Imports
South Korean oil importers Hyundai Oilbank and SK Innovation have received an offer from Tehran to utilize the fleet of the National Iranian Tanker Company ( NITC ) to restart shipments, Dow Jones reported on 18 July. Seoul halted oil imports from Iran in line with an EU ban on the provision of re-insurance for tankers carrying Iranian oil, which took effect on 1 July (MEES , 2 July). Instead, the National Iranian Oil Company (NIOC) and the Central Bank of Iran (CBI) have offered to provide up to $1bn of protection and indemnity (P&I) cover for shipments.
An unnamed Hyundai Oilbank official told Dow Jones that the Korean government, which before the cessation of imports covered up to 7.5% of its oil needs from Iran, is positively considering the Iranian proposal and could approve an agreement by the end of the month. South Korea, unlike India, China and Japan, has refused to offer state guarantees to underwrite any potential insurance claims in order to keep Iranian crude imports flowing. The Iranian P&I offer may be too low, since globally P&I cover is normally up to $7.6bn per trip. MEES understands that it would be very difficult for Seoul to bridge the gap between the Iranian offer and rates available before the EU insurance embargo.
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