Oil at Energy Bourse Pending Approval

Oil at Energy Bourse Pending Approval Oil at Energy Bourse Pending Approval

The assessments being conducted by the ministry of economic affairs and finance on potential supply of crude oil at the energy bourse is in the final stage, investment director at the National Iranian Oil Company (NIOC) was quoted by Fars news agency as saying.

The NIOC is ready to supply crude at the energy bourse as soon as the ministry of economy approves the offering, Ali Kardar said.

Oil is planned to be offered at free on board (FOB) price, and interested buyers, including international firms, will have to pay in Iranian currency, as per the oil ministry's policy on trade of oil-based commodities at the energy bourse.

The pricing is based on the average price of exported oil in the past one month.

Several points at issue are to be considered by the ministry of economy, including a mechanism through which share of the National Development Fund of Iran (NDFI), which must be paid in hard currency, is to be settled while trade of oil at the energy bourse will be carried out in Iranian currency.

In earlier offerings, crude oil was intended only for domestic consumption and buyers have not been allowed to export.

Buyers were previously able to export oil only after refining, but the oil ministry is following a different policy by offering the oil for export.

The prospect offering can be sold in foreign markets, and buyers are required to have their tankers at export terminals for delivery.

An initial 100,000 barrels of oil was expected to be supplied at the bourse last November;however, due to issues concerning price and payment the supply has not been fulfilled as of yet.