Oil Ministry to Offer Crude at Energy Bourse

Oil Ministry to Offer Crude at Energy Bourse
Oil Ministry to Offer Crude at Energy Bourse

The oil ministry plans to supply sizeable volumes of crude oil and other oil products at the energy bourse as of the next Iranian calendar year (begins March 21), Shana news agency reported.

"We are ready to offer 100,000 barrels of crude oil at the bourse on a daily basis," Oil Minister Bijan Namdar Zanganeh said, pointing to naphtha, fuel oil, kerosene, and liquefied petroleum gas (LPG) as other oil products that will be offered at the energy bourse.

The ministry is pursuing a different policy by offering the oil only for export only. The oil offered at the bourse has so far been aimed at the domestic market, with an internal delivery point. The new offering, however, requires buyers to have their tankers at export locations for delivery, with the oil to be sold in foreign markets.

Crude oil barrels will be offered at free on board (FOB) price, and interested buyers, including international firms, will have to pay in Iranian currency, as is the oil ministry's policy regarding supply of oil-based commodities for trading at energy bourse.

"These can be supplied through any possible trading option, including future contracts," the minister told a meeting of senior economic officials and stockbrokers.

Denying reports of his opposition to the involvement of private sector in oil industry's major development projects, Zanganeh asserted that even energy funds and their investors are allowed to contribute to oil and gas development projects at a time when foreign investment is hard to find.

"It's true that big investment may sometimes run into problems, but as far as the future of the oil industry – and the future of national economy – is concerned, our projects are open to investments of any amount from private investors," he noted.

On feedstock pricing, Zanganeh said the oil ministry had put forth no proposals regarding the setting of a certain price for feedstock that is supplied to petrochemical complexes. "Several market experts had offered an increase in prices, and apparently the parliament was of the same opinion," the minister stated.

The oil ministry, the ministry of industry, mine and trade, and the ministry of economic affairs and finance are conducting the pricing procedures following a decision made by the Stock Market Stability Oversight Committee.

According to a cabinet approval, refining companies should, within a five-year period, assess and report the quality of five main oil products as well as aviation fuel, based on oil ministry standards.

A special fund will also be set up that would receive at least 30 percent of the annual profits of the refining companies to contribute to a project for improving feedstock quality.