BASRA - The state-owned Iraqi Oil Tankers Company is in the process of rebuilding its fleet of vessels and hopes to be able to handle crude oil exports in the future by securing new vessels, including Very Large Crude Carriers (VLCCs), to match the tanker fleets of its Gulf oil exporting peers, company director Ali Qays Abdul-Jabbar told Iraq Oil Report in an interview.
The company once operated 25 tankers, but in the 1990s it was limited to handling only transportation of high sulfur fuel oil because of international sanctions on Iraqi crude oil exports.
Now a change in policy means that the tankers company can order new tankers and is preparing plans to submit to the Ministry of Oil to enable it to resume crude oil exports. Saudi Arabia, the UAE, Kuwait and Iran have their own tanker companies that transport crude oil around the world while Iraq, the second largest oil exporter in OPEC after Saudi Arabia, has lagged behind and therefore lacks the flexibility that the other oil exporters in the region enjoy.
Two new tankers are due to be delivered next year, adding to four already secured since 2007.
Iraq wants to start selling oil under a Cost, Insurance and Freight (CIF) structure, Abdul-Jabbar said, and the company is being restructured so it can have a role in the future transportation of crude oil. Selling on a CIF or delivered basis rather than on a Free on Board or FOB basis works to the advantage of the seller.
A full transcript of the interview is available below for Iraq Oil Report subscribers.