Iran Deal to Have Far-Reaching Impact for Shipping, Oil

Increased exports could absorb up to 5 percent of global VLCC capacity

The easing of economic sanctions in place against Iran will have far reaching implications for the shipping industry, ShippingWatch reports.

In particular, the tanker sector is said to be the main likely beneficiary of eased sanctions as Iran is poised to significantly raise oil exports if it is allowed to do so.

The report suggests that much of any increased export volumes would be handled by Iran's own fleet, but observers still expect the effect to extend to international players such as Euronav, Nordic American Tankers, Teekay Tankers, and Tsakos Energy Navigation.

In addition, if significant additional volumes of oil hit international markets an already depressed oil price may fall further.

In the event of an even lower oil price, the report suggests demand for tankers as floating storage will also push tanker rates higher.

Iran has said it could increase oil exports by one million barrels per day within months of sanctions being lifted.

"A ramp-up of that magnitude would absorb another 20-30 VLCCs or up to 3-5 percent of the global VLCC fleet; it could drive the crude tanker market to another 5-year high, by our calculations, and twice as high as the levels we have seen the last couple of weeks," said an analyst for Morgan Stanley.

Following last week's meeting between Western and Iranian officials a framework agreement has been made to ease sanctions on Iran in return for commitments on the country's nuclear enrichment programme.

As yet, however, no timetable has been set and a detailed agreement on the extent of sanctions to be eased will only now begin to be negotiated.

On Thursday, Euronav said 2015 was looking like a strong year for tankers, adding that volatility in the tanker segment should be embraced "as it provides the Company with ongoing opportunities to deliver value."