South African department of energy is optimistic that the negotiations with the European Union will be resolved.
 

Negotiations with the European Union (EU) over the insurance of oil cargoes between SA and Iran were at a crucial stage, but the Department of Energy was optimistic that they would be resolved.

 

SA had received a 180-day waiver from the U.S. on the importation of oil from Iran, after the U.S. and the EU imposed sanctions against Iran.

 

But Pan-African Investments CEO Iraj Abedian said despite the waiver, ensuring that those cargoes were properly insured was vitally important otherwise their price would surge.

 

"No one in their right minds would just allow a cargo to be exported from Iran without insurance, " Dr Abedian said.

 

"No bank would finance a shipment without proper insurance.

 

Speaking during last week’s post-Cabinet media briefing, the Department of Energy’s director-general, Nelisiwe Magubane, said she was optimistic that negotiations with the EU would turn out in SA’s favor, though she declined to divulge their exact nature.

 

Dr Abedian said there were only four major international shipping underwriters, with the top three being Europe-based — Lloyds of London, Munich Re and Zurich Reinsurance. "Going after the underwriters is the cheapest way to ensure that the sanctions are implemented," he said.

 

Last week, U.S. Secretary of State Hillary Clinton said that SA and six other countries, including Turkey and India, had been granted 180-day waivers on the oil imports from Iran.

Ms Clinton’s announcement means that China is the only major importer of Iranian oil not to have received a waiver.

 

Iran has historically been one of the major suppliers of crude oil to SA.

  

 

During a parliamentary question session last week, Deputy President Kgalema Mothlanthe said that the sanctions imposed on Iran were not led by the United Nations.

 

"These sanctions are particularly stringent with regard to petroleum-related banking transactions," Mr Motlanthe said.

 

Dr Abedian said the U.S.’s issue with the banks was to ensure that they did not use a financial derivative or similar instrument to get around the non-insurance of oil cargoes.
 

(Source: businessday.co.za)