So then what to make of the return of Iran – the holder of the world’s fourth-largest reserves of crude and largest of natural gas – to the international stage?
From the starved situation at East Asian yards, the news will be greeted with huge relief. I do wonder, however, given the massive fight there will be for these prized orders whether or not the winning yards will actually be taking on profitable contracts, or merely work to fill out orderbooks.
Certainly, financing will be no problem for the likes of IRISL and NITC, with state-backed banks in South Korea and China falling over themselves to provide capital.
Iranian news reports do tend to veer towards the fantastical rather than reality, so always need to be taken with a large dose of salt. Nevertheless, speaking with the head of IRISL and gleaning other reports it looks like IRISL is in for 30 ships, a mix of boxships and bulkers, while NITC looks likely to order around 25 tankers. Kim Hong-yun, an analyst at Dongbu Securities in South Korea, estimates the initial ordering spree from these two companies will total around $6.7bn.
Splash understands NITC and IRISL officials toured a number of Korean and Chinese yards towards the end of last year and are expected back in East Asia later this month to firm up orders.
The prices the Iranians can get for these newbuilds will mark a new low benchmark. Caught between having no work and taking loss-making contracts will exercise the minds of many a yard manager.