1st Oil Cargo Lands in Europe

1st Oil Cargo Lands in Europe1st Oil Cargo Lands in Europe

The Monte Toledo oil tanker covered the unperturbed voyage from Iran to Europe with a haul of 1 million barrels of crude in just 17 days, a journey that has been in the making for four years.

On Sunday, the tanker became the first to deliver Iranian crude into Europe since mid-2012, when Brussels imposed trade and financial embargos against Iran's nuclear program. The ban was lifted in January as part of a broader deal that ended a decade of sanctions, Bloomberg reported.

The 275-meter tanker started offloading its cargo into a refinery owned by Compania Espanola de Petroleos, or Cepsa, a few kilometers from Gibraltar.

In southern Spain, the tanker’s arrival was met with little fanfare. Nonetheless, there is a wider significance.

As the Monte Toledo started to pump to shore through two 21-inch floating hoses connected to a giant buoy and a 1.8-kilometer submarine pipeline, Iranian President Hassan Rouhani declared in Tehran that more oil exports “will be added soon”.

Around Europe, other tankers with Iranian oil are close behind the Monte Toledo. In February, 29 vessels loaded crude from the Middle Eastern nation, according to data compiled by Bloomberg.

Of them, three are heading toward Europe–the Eurohope tanker is sailing to Constanta, an oil port in Romania and the Atlantas is on its way to France. Another one, the Distya Akula, is anchored at the mouth of the Suez Canal, and is likely to head into a Mediterranean port.

The Monte Toledo and its companions are at the vanguard of Iran's return to the European oil market. Petro-Logistics SA, a Geneva-based tanker-tracking firm, estimated Iran exported in February about 1.4 million barrels a day, up 350,000 barrels a day from the average 2015 level.

Seth Kleinman, head of energy research at Citigroup in London, said more countries are buying Iran's crude oil.

"You see tankers going to Spain, Romania, Tanzania, France and the UAE. You got an uptick to India in February too," he said.

If all goes as Tehran has planned, the Middle Eastern country will boost its production back to the 3.6 million barrels a day it pumped in 2011.

After the European embargo was imposed and the US tightened other sanctions, Iranian oil production dropped to about 2.8 million barrels a day.

Iran wants to win back customers in Europe, where Russia, Saudi Arabia, Iraq and other rival suppliers stepped in after the embargo was imposed.

Tehran also faces a rival unknown four years ago: The US has started exporting crude and companies such as Exxon Mobil Corp. are shipping American oil to Mediterranean refineries.