Dubai — After decades without its own vessels, Iraq is looking to rebuild its tanker fleet under the Iraq Oil Tanker Company, paving the way for sales of crude oil on a delivered basis.
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State-owned IOTC has reached a number of agreements with Iraqi shipping company Al-Iraqia Shipping Services & Oil Trading, to help build the fleet and train staff, IOTC general manager Hussein Allawi said Thursday.
Formed in June 2017, AISSOT is a Dubai-based joint venture between IOTC and Arab Maritime Petroleum Transport Company. IOTC owns and manages tankers transporting refined petroleum products. AMPTC is owned by member countries of the Organization of Arab Petroleum Exporting Countries.
"They [AISSOT] are promoting their crude export and own transportation volume, so that more will be handled by their national shipping arm," a shipping executive at a North Asian refiner said.
Currently, the majority of Iraq's crude and oil products are sold on a free on board basis, meaning the seller pays for transportation of the goods.
With its own fleet, Iraq could sell on a delivered basis and manage the shipping of crude to its customers. Other Persian Gulf crude producers supply on an ex-ship basis.
"They plan to expand their fleet by purchasing second-hand vessels and ordering new-building vessels so that they can become a similar size to Bahri and gain CFR export volumes, so that means they will acquire another 40-50 VLCCs," the executive said.
It currently has two VLCC tankers, the Baghdad and the Basra, along with two Aframax tankers the Album and the Zirku, shipping sources said.
Saudi Arabia's state-owned shipping company, Bahri, owns the world's largest VLCC fleet with 45 vessels. Iran's National Iranian Tanker Co, is the second largest with 42 VLCCs.