State-owned National Iranian Oil Company (NIOC) has said that it intends to boost exports of Iranian crude via the newly completed 1,000km Goreh-Jask pipeline that aims to allow Iran to circumvent US-led sanctions by piping oil direct to the Gulf of Oman thus bypassing the strait of Hormuz.

But international banks' reluctance to open letters of credit (L/Cs) may thwart Iran's ambitions unless Tehran can successfully conclude negotiations for the US to return to the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear deal.

Critical export infrastructure

NIOC has already started to inject oil into the 46-inch diameter pipeline that connects the Islamic republic's prime oil producing regions with the port of Jask on the country's southern Gulf of Oman coast from where it can be shipped directly to Iran's burgeoning customer base in Asia.

Currently Iran must sidestep US sanctions by either relabelling Iranian oil as Iraqi oil, using international brokers to disguise the crude's origin or disguising oil shipments and export routes using ship-to-ship transfers.

US and nuclear deal

Iran's efforts to raise oil export capacity coincide with discussions in Vienna between Tehran and Washington to readmit the US into the JCPOA nuclear deal.

This could lead to an easing of US sanctions and possibly encourage more international banks to write L/C business for trades with Iran.

The talks in Vienna are expected to carry on for around another fortnight after which negotiators will return to their respective capitals for consultations.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.