Continued difficulties transacting on letter of credit (L/C) terms may hinder Iran's endeavours to list its national tanker company.

Tehran wants the listing to raise cash to replace or refurbish vessels in its aging fleet of oil tankers as the Islamic republic gears up for its return to the global oil market.

Tanker upgrades

While Iran has one of the world's largest fleets of oil tankers, many of the vessels need insurance, testing, inspection and certification - known as ship classification - to be able to ship Iranian crude around the world.

But potential investors may be reluctant to buy shares in National Iranian Tanker Company (NITC) for as long as the Islamic republic's ability to raise L/Cs for oil trading and other purposes is hampered.

L/C difficulties remain

The easing of sanctions on Iran earlier this month means Iran is now able to do more L/C business, but difficulties remain.

These include some US and EU sanctions that remain in place until legislators in those jurisdictions ease or lift them and the need for Iran's banks to bring systems and compliance standards up to global standards.

Nevertheless, NITC plans to list, first of all on local exchanges before looking for overseas listings to raise funds.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.