Oil for Export at the Bourse

Oil for Export at the Bourse
Oil for Export at the Bourse

One hundred thousand barrels of crude oil will be offered in the energy bourse in October for export, said the National Iranian Oil Company (NIOC) director of international affairs Seyed Mohsen Ghamsari.

Buyers were previously able to export oil after refining, but Oil Minister Bijan Namdar Zanganeh has said that the new shipment can only be sold in foreign markets, ISNA reported. Buyers are required to have their tankers at export locations for delivery. The offer for the 100,000 barrels will be free on board (FOB) and interested buyers, including international firms, will have to pay in Iranian currency.

Earlier, such crude intended only for domestic consumption and buyers have not been allowed to export.

The oil ministry follows a different policy by offering the new oil for export, he noted.

Domestic oil supply has been low because small refineries inside the country consume less oil and more gas condensate, according to Ghamsari. He added that the oil ministry will continue to offer oil in the energy bourse for domestic consumption. Offering two cargoes of oil does not create conflict and even small enterprises can purchase oil in the bourse, the official said.

Ruling out the possibility of reducing oil prices, he said the new delivery could be met with a cold reception from buyers due to high pricing, although it is supplied to refineries with the same price as offered in the bourse.

The supply of crude was temporarily suspended on August 9 at the energy bourse due to lack of buyers. In view of crude being  sold at a subsidized price to customers of major state-owned refineries, the managing director of the energy bourse Seyed Ali Hosseini cited the unofficial selling price as the main reason for private buyers’ lack of interest.

Ghamsari insisted that the oil ministry is not offering oil for exports in the domestic market to achieve higher sales.

“In some transactions, commodities are auctioned and buyers who meet the asking price win,” he explained. “The price of oil is not discovered in the energy bourse, instead it is put to auction in Iran.” The sale of oil with the highest price and maximum volume and the transfer of revenues to the Central Bank of Iran (CBI) and treasury are among the responsibilities of the international affairs department of the oil ministry, he concluded.