Imports of Middle East-origin bitumen into India may slow down, but will not stop completely, even as US president Donald Trump threatened to impose an extra 25pc tariff on imports from countries engaged in business dealings with Iran.
Trading activity and importers of Iranian bulk bitumen may slow down in the near term on concerns that importers and vessel owners might come under US sanctions, but activity will not stop completely as importers can transship the cargo from the UAE, India-based importers and market participants said. India is a net importer of bitumen and typically takes deliveries from Iran.
"It is either ship-to-ship transfer (STS) or go to the UAE and load but the freight will increase because of this issue," an importer said, adding that import costs will surge.
But STS will not be viable if the Indian government decides to stop trading with Iran given that the importer will have to provide a certificate of origin to customs officials, some importers said.
"Loading from the UAE is the least risky but it is very expensive so, unless the situation demands us to load from the UAE, it won't happen. The freight will increase by $30-40/t compared with the direct voyage freight if cargo has to be discharged in the UAE and loaded again," said an importer, who is also a vessel owner.
Increasing imports of Iran- and Iraq-origin drums from Iran's Bandar Abbas port is also an option, given that drum parcels are typically transshipped through the UAE.
But a longer voyage from the Middle East and a longer decantation time in India could slow down domestic trading activity and push contractors to seek cargoes from Indian refiners.
Meanwhile, overall seaborne cargo trading activity and discussions have slowed because of internet and communication blackouts in Iran on the back of widespread protests and unrest. Indian importers are unable to reach out to exporters to negotiate.
But this has not entirely delayed loading activity in Bandar Abbas."The ongoing protests have not impacted port operations, and ports and customs are working as usual but there is some delays in loading and discharge activities in the night because truck operators have stopped working in the nights," a Middle East-based exporter said, but added that vessel owners are apprehensive to send their vessels to Iran because of sanction worries.
The Office of Foreign Assets Control (OFAC), the US Treasury Department's sanctions enforcement arm, sanctioned at least five bitumen tankers operating in the Middle East-India route on 18 December.
