Greece's biggest oil refiner Hellenic Petroleum agreed on Friday to buy crude oil from Iran after negotiations with National Iranian Oil Company officials in Athens.
The deal would make Hellenic Petroleum the first European refiner to restart trade relations with the Persian Gulf country after the lifting of international sanctions, Reuters reported.
Hellenic Petroleum was a major buyer of Iranian crude, which accounted for about 20% of the Southeast European country's annual crude oil imports before sanctions were imposed on Tehran in 2011.
Greece was one of the biggest European importers, buying about 120,000 barrels a day in 2011, data from the International Energy Agency shows.
The agreement came after Iran's Deputy Oil Minister Amir-Hossein Zamaninia and his Greek counterpart Panos Skourletis met in Athens on Friday.
The two ministers also attended talks between executives from Hellenic Petroleum and NIOC, a meeting that reportedly took place last week.
Under the deal, the refiner will start buying oil from Iran immediately and will settle its multimillion euro outstanding debt to NIOC, Hellenic Petroleum said in a bourse filing.
The refiner is estimated to owe Iran around $550-600 million for oil it bought before the sanctions, but was unable to pay when the international embargo was imposed.
"The deal was achieved after consecutive meetings in Athens and Tehran," Hellenic Petroleum said. "The deal is beneficial for both sides."
The Road to Europe
After meeting Zamininia, Skourletis told Reuters Iran believed Greece could be a conduit for reentering Europe's oil market.
"They (Iran) are positively disposed toward Greece and think that Greece can be the European conduit for them to reenter the market," he said, adding that the two countries had traditionally enjoyed close relations.
"They said that the debt (settlement) can open the way so that our cooperation is boosted," Skourletis said, adding that Greek Prime Minister Alexis Tsipras was due to visit Iran early next month.
Iran used to sell as much as 800,000 barrels per day to European refiners in Italy, Spain and Greece before the sanctions over its nuclear program were imposed.
The oil market is bracing itself for a jump in supplies from Iran. Tehran ordered a 500,000-bpd increase in its oil output, of which 200,000 bpd will go to Europe, after the sanctions were lifted last week.
Oil analysts surveyed by Bloomberg anticipate the nation will ship 100,000 barrels a day more crude within a month of sanctions ending, and four times that amount within half a year.
