Feb 29 Oman aims to expand shipping and trade links with Iran and get ahead of rivals after the lifting of international sanctions on Tehran, leading port officials involved say.

Measures were lifted last month as part of a nuclear deal with world powers, ending years of isolation which saw the international shipping sector cut ties and disrupt supplies to import-dependent Iran.

The United Arab Emirates previously enjoyed greater shipping activity with Iran but Oman's nearby Sohar port is looking at expanding ties.

Oman could also benefit from a spat between rivals Saudi Arabia and Iran which saw Riyadh cut ties last month and others like the UAE to downgrade relations. Annual UAE-Iran container trade pre-sanctions was estimated at 1.5 million TEUs (20-foot equivalent units).

Reports cited by ship insurers pointed to a ban on all Iranian flagged ships calling at Saudi ports and neighbouring ally Bahrain.

While Oman maintained warm ties with Tehran it now faces competition from across the Arabian Sea in the form of India.

Andre Toet, chief executive of Sohar's port and freezone, acknowledged they were smaller than nearby terminals.

"What we are trying to do is see if we can get a piece of the cake and divert or create new business opportunities for business between Oman and Iran using Sohar as the base for that," he told Reuters.

"The first signs are there that it is happening. It is still in very small pockets."

Sohar, a 50-50 joint venture between the government of Oman and the Dutch port of Rotterdam, acts as the port authority and landlord and runs its 45 km freezone.

Toet said Sohar was targeting more trade with major Iranian dry bulk and container line IRISL and national tanker operator NITC. An IRISL ship made its first call to Sohar recently.

Separately, a direct service between Iran's major cargo port of Bandar Abbas and Sohar had opened up. Toet said the port was looking at links with other Iranian terminals such as Chabahar.

"We are talking to several Iranian companies looking for possible investment in the free zone - small metal manufacturing and warehousing distribution of agricultural products," he said.

Total vessel calls to Sohar reached 2,545 last year - a rise of 26 percent from the previous year.

With global cargo and container shipping markets suffering a prolonged recession since 2008, Iran represents a potential area of growth for the Oman International Container Terminal (OICT), located in Sohar.

"I can see high potential for an increase of trade between our two countries," said Albert Pang, chief executive of OICT, which is operated by investors including Hutchison Port Holdings and Oman's government.

Last year OICT reported cargo volumes of around 540,000 TEUs, versus 329,000 TEUs in 2014, and Pang said it was targeting double-digit growth this year, with Iran potentially adding to it.

By Reuters