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NIORDC Will Stop Swap Deals

NIORDC Will Stop Swap Deals NIORDC Will Stop Swap Deals

Swap of petroleum products with the northern neighbors will end in the next Iranian calendar year (begins March 21), Mehr news agency reported Saturday.

Rising domestic gas production, which consequently cuts back liquid fuel consumption, is reportedly the main reason for the halt on swap operations. Iran swaps oil products, including mazut, diesel fuel, and liquefied gas, with Central Asia, the Caucasus, and Iraq, to provide fuel for five power plants in the north.

Given the projected surplus production, Iran is expected to export 41 million tons of mazut, and 15 million liters of diesel next year, said Nasser Sajadi, managing director of the National Iranian Oil Refining and Distribution Company (NIORDC). “Swapping oil products is no more economical,” he said.

As one of the five Caspian littoral states, Iran borders Sea of Oman and Persian Gulf in the south, and could be used as a transit route for moving energy from the Caspian Sea, which has no access to the international waters, to the world markets.

Oil swap can be an important source of revenue as the northern neighbors with abundant hydrocarbon resources need access to sea lanes. Oil swap operations, which were halted for five years, resumed in 1997 between Iran and the Caspian states.

However, obstacles prevented Iran from benefitting from the deals as had been expected, including the economic sanctions imposed by the US-led western states  over Tehran’s nuclear program , Russia’s rivalry with Iran over controlling energy export routes and political and economic instability in some regional countries.

According to reports, Iran swapped more than 254 million barrels of oil over 13 years that generated $880 million revenues, the news agency said.

 

Financialtribune.com