Business And Markets

Oil Offer to Bondholders

The Ministry of Economy on Sunday offered to settle payment to holders of Islamic bonds by delivering crude oil. 
In a notice published on its news portal,, the ministry said the “provision” would be available only to bonds maturing on May 2021. 
It asked bondholders who may be interested in the offer to submit their request to the ministry’s debt management office. 
Applications will be reviewed by the office and sent to the Plan and Budget Organization. After approval, the PBO will introduce bondholders to the National Iranian Oil Company to receive crude oil equivalent to the value of bonds.   
The notice didn’t provide details, including the price of crude oil to be delivered. 
IRNA quoted PBO head Mohammad Baqer Nobakht as saying on Saturday that “the government will presale a portion of its oil production to domestic buyers in the next fiscal year (March 2021-22)”. 
He was referring to a similar proposal by the government in August to domestic buyers using standard salaf contracts.  
The government planned to presale 220 million barrels of crude oil to the people in one year using Islamic parallel salaf contracts. Reimbursement was supposed to be backed by the government’s future crude oil sale after the US embargo on oil export is lifted. 
At that time unofficial reports said the plan was opposed by senior officials, including the judiciary chief, Majlis speaker and a group of lawmakers, arguing that it would further add to the government debt burden.  

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