Iranian tankers get out of US embargo before signing deal

At least three Iranian warships carrying nearly five million barrels of crude oil have left the US military base in the Strait of Hormuz in the first such exit in two months, as ship owners carefully put down ahead of the signing of the US-Iran deal in Geneva on Friday.

Two large tankers named Diona and Hero 2 – both owned by the National Iranian Tanker Company and under US sanctions – passed through the US Navy blockade, carrying a combined total of 3.8 million barrels of Iranian crude oil, according to shipping data provided by Kpler.

A third Iran-bound ship carrying 1 million barrels of Iranian crude left Wednesday, according to Kpler.

“Their departure from the embargo suggests that other tankers trading in Iran are also preparing to trade again,” said Michelle Wiese Bockmann, senior analyst for maritime intelligence at Windward.

The US and Iran signed a Cooperation Agreement on Monday to end the nearly four-month conflict, with a formal signing ceremony to be held on Friday in Geneva. The deal, the details of which have not yet been disclosed, is expected to reopen the Strait of Hormuz and lift sanctions on Iran’s oil exports.

Washington will allow Tehran to immediately begin selling oil and gas once a deal is signed this week, in exchange for Iran’s commitment to curb its nuclear program, the Wall Street Journal reported Tuesday.

The Strait of Hormuz, through which a fifth of the world’s oil flowed before the war, was effectively closed during the conflict. The US Navy has blockaded Iranian and Iranian ports, targeted ships linked to nations it considered enemies, stopped hundreds of ships and disrupted the flow of energy around the world.

The prospect of a reopening has prompted some shipowners – battered by months of rising freight costs and war-risked insurance premiums – to begin redeploying ships to Gulf ports in anticipation of increased demand for restocking, while most remain cautious and hold back.

“The maritime industry treats the news with something closer to disbelief than celebration,” said Lloyd’s List Intelligence.

Insurers are holding firm on war risk premiums, seeking “strong evidence” that the waterway will remain safe, say Lloyd’s analysts. “While a lull in hostilities will relieve stranded sailors and boost tanker and bulk markets, the industry sees this as a fragility rather than a return to normalcy,” analysts said in a client note on Tuesday.

But some owners of large-scale crude carriers (VLCC) are looking to gain “first-mover advantage,” putting tankers in the Middle East Gulf, while others are planning to hold back, according to Lloyd’s.

A number of VLCCs sailed from the South China Sea across the Indian Ocean to ports in the United Arab Emirates, where at least 30 ships were already docked, according to maritime intelligence firm Windward.

For now, traffic in the crisis is likely to remain low as both blockades are in effect until the deal is officially signed on Friday. The US Navy has reminded the industry that “nothing has changed and no deal will be signed,” said Tim Wilkins, executive director of Intertanko, an independent tanker association.

The lag ratio is important. Kpler estimates that 118 full tankers could leave the area within 15 days of the signing of the agreement, but the increase in outgoing vessels is likely to be a one-time thing, rather than a long-term restoration of traffic.

“Many ship owners seem to be waiting for more detailed information before planning new Strait of Hormuz navigation,” said Niels Rasmussen, senior shipping analyst at BIMCO. “They will want assurances that the transportation is not only permitted but also safe before sending their ships into port.”