NIOC: No dent in Iran payment in spilled condensate cargo heading to South Korea

National Iranian Oil Company (NIOC) said South Korea will fully pay for the condensate cargo that was destroyed in a tanker collision near China this week.

The cargo was purchased on the basis of Persian Gulf free on board (FOB) which means the buyer has liability for goods that are damaged or destroyed during shipment between the two parties, NIOC’S Department of International Affairs said on Monday, Shana reported.

“FOB shipping point” (or origin) means that the buyer is at risk while the goods are shipped, and ‘FOB destination’ states that the seller reserves the risk of loss until the goods reach the buyer.

An Iranian oil tanker carrying gas condensate collided with a Chinese ship and exploded in the East China Sea on Saturday evening.

The Sanchi tanker, heading to South Korea and registered in Panama, collided with the CF Crystal some 160 nautical miles off the coast near Shanghai.

The Iranian tanker was carrying 136,000 tonnes of condensate, an ultra-light crude, an equivalent of under a million barrels worth around $60 million based on current crude oil prices.

South Korean customers had purchased the cargo on a Persian Gulf FOB basis.

NITC formed an emergency committee with senior company officials immediately after the news of the collision was transmitted to Tehran.

The state-run company has dispatched two vessels to the spot of the explosion to help rescue operations.