Iran struggles for oil exports despite the nuclear deal

Contrary to the expectations, Iran is finding it extremely difficult to translate into reality its President Hasan Rouhani's hopes of bringing economic relief and new prosperity to the country based on a resurgent energy sector. The hopes were generated from the landmark nuclear deal that was signed between Iran and the World powers in July 2015 and which promised lifting of all economic sanctions from Iran, unfreezing billions of dollars worth of its assets and allowing Iran's oil to be sold globally.
Earlier in mid-January, after the UN's nuclear watchdog IAEA (International Atomic Energy Agency) confirmed that Iran had complied with the deal designed to prevent it developing nuclear weapons, all economic sanctions were lifted. The EU foreign policy chief Federical Mogherini said that the deal would contribute to improved regional and international peace and security.   
However, Washington for reasons best known to it dragged its feet and the process created loads of problems for Iran to normalise business transactions with the EU member countries that announced lifting of all sanctions. Iran's supreme leader Ayatollah Ali Khamenie was quoted in the third week of April by a news agency as saying that while on paper, the US officials have said that foreign banks can do business with Iran, but in practice they were fomenting Iranophobia to prevent improvement of relation.
Despite rising tensions in the Middle East and continuous fall of oil price, Iran's energy minister Bijan Zanganeth announced soon after the official lifting of Western economic sanction on Iran that his country's oil production would increase by 1.5 million barrels a day by 2018. Tehran quickly sought to make up for the lost trade to Europe since the EU had imposed sanctions in 2011 and 2012 and lost a third of its export market and tried to make it up by relying on the Asian markets.
It may be recalled that as part of the deal, Iran had to drastically reduce its number of centrifuges and dismantle a heavy-water reactor near the town of Arak - both could be used in creating nuclear weapons. Iran has always maintained that its nuclear program is peaceful.
SHORTGE OF OIL TANKERS: Iran is facing shortage of ships to carry crude to Europe to step up its exports. A Reuters report from London recently quoting a senior Iranian official said, Iran has 55 to 60 oil tankers in its fleet but many of them are not seaworthy and some of them are being used to store unsold cargoes. The report quoting industry sources say, 25-27 tankers are parked in sea lanes close to terminals, including Assalueh and Kharg island, for this purpose. Official sources admit that about 20 of the large tankers are needed to be modernised to meet international shipping standards before putting them to regular service. Besides, 11 other tankers are engaged in carrying oil to Asian buyers.
So Iran needs foreign ships for a big export push which in increasingly becoming difficult to hire. Knowledgeable sources say the main reason for this problem is that US restrictions on Iran have not been lifted prohibiting any trade in dollars or involving any US firms including banks. Oil and tanker traders are being affected because both are priced in US dollars.
This problem has been explained by Michele White, a consultant of Intertanko, an association representing majority of world tanker fleet. He said: "We have witnessed reluctance by our members generally to return to Iranian trade given the prohibition on use of the US financed system - essentially to no US dollars." This clearly means Tehran is not being able to hire foreign tankers for its use and Iranian officials have admitted it.
Yet another problem is getting reinsurance coverage for the ships doing business with Iran. US reinsurers are being restrained by Washington's sanctions on Iran. Besides, whatever insurance cover is available, it comes with risks and they are not sure if and when the limited available coverage would be lifted if the wider sanctions are re-imposed by the US.
KHAMENI ACCUSES US OF BAD FAITH: Iran has reasons to be unhappy. Its supreme leader Ayatollah Ali Khameni in late April accused the United States of 'hostility' and 'bad faith' and said the implementation of its nuclear deal with world power was not being honoured. With nuclear-related sanctions lifted, US and European diplomats have said that there is no bar on non-American banks doing business with Iran; but it is not happening in reality, he added.  
Before 2012 Iran's oil exports amounted to two million barrels per day (bpd) mostly going to Asia (China, South Korea, India and Japan). However, since the lifting of ban in mid-January, according to newspaper reports quoting tanker-tracking sources and ship brokers, Iran, through eight foreign tankers have carried eight million barrels of crude to Europe. No Iranian tanker was used in this trade.
Western analysts have suggested that with the fourth largest oil reserves and second highest gas reserves in the world it appears natural that the country should take the advantage to expand its stagnated oil and gas production.  Its dream for better days was only natural.
The hope of a resurgent Iran was also fuelled by the onrush of hundreds of representatives of businesses from Europe and Asia to the Iranian capital after the signing of the nuclear deal from end of November 2015. Some of the world's largest energy companies came with dossiers to hear from the government about their future plans. These firms included BP, Total, Shell, Statoil and Sinopec. Encouraged by their presence, Iran's energy minister Bijan Zanganeh and CEO of National Iranian Oil Company (NIOC) Roknoddin Javedi announced their new programme for development of energy projects worth $30 billion.
Actually, this was for the first time they were prepared to offer those contracts to western companies and provide more flexibility. A perspective briefing prepared by energy expert Gregory Brew in January 2016 suggested that "over 150 companies attended the November Tehran conference and Iran hopes to attract $150 billion in new investment over the next five years."
Genuinely, there was a lot of potential in the projects announced by the Iranians at the Tehran conference six months ago - four months after the signing of the nuclear deal and just a month before the withdrawal of sanction over Iran in mid-January 2016 announced by the UN. Given the good faith and honest intention, the successful implementation of the Joint Comprehensive Plan of Action (JPCPOA), the official name of the nuclear deal between Iran and Western powers signed in July 2015, has immense possibilities to turn Iran into a new energy superpower.
Meanwhile, Washington's foot-dragging and vagueness in implementing the international agreement it, along with other world powers, signed with Iran have created worldwide confusion about its intention. Unless a quick decision is taken by Washington and the confusion is cleared, Iran's supreme leader Ayatollah Ali Khameni's harsh word for the US may prompt many to consider justified. After all, Iran, the other party to the nuke deal, has kept its part of the bargain and strictly complied with the difficult task while the integrity of the US is being questioned.  
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