Uruguay New Customer of Iranian Crude

Uruguay New Customer of Iranian CrudeUruguay New Customer of Iranian Crude

Following the energy negotiations with Brazil, another South American country, Uruguay, has showed interest in importing Iranian oil.

South America is becoming Iran’s emerging oil market, as it was not a target destination before the imposition of sanctions, Mehr News Agency reported. 

Uruguay's Vice President Raul Sendic Rodriguez, who arrived in Tehran on Sunday at the head of a delegation, said after a meeting with Iran's First Vice President Es'haq Jahangiri that Uruguay is keen to start oil imports from the Persian Gulf country.

Uruguay is bordered by Argentina to its west and Brazil to its north and east. It is home to 3.3 million people, of whom 1.8 million live in the metropolitan area of its capital and the largest city, Montevideo.  With an area of approximately 176,000 square kilometers, Uruguay is geographically the second-smallest nation in South America after Suriname.

Uruguay has no reserves of crude oil and it imports crude from Venezuela, which sits on 298 billion barrels of in-place oil reserves. 

Venezuela has a deal to sell up to 40,000 barrels of oil a day to Uruguay under preferential terms. According to data from US Energy Information Administration, Uruguay has imported 27,000 barrels of oil per day in 2012.

Prior to the US-engineered sanctions were put in effect against the country’s energy and trade sectors, 90% of Iran’s oil exports were accounted for Asian and European markets and the remaining 10% were destined to South Africa. But with the removal of sanctions on Jan. 16, diversification of oil export markets has become Iran’s new policy.

Amirhossein Zamaninia, the Oil Ministry’s deputy for international affairs, recently referred to the country’s plan for starting oil exports to some South American countries and announced that negotiations with some of the countries have started. Iran and Brazil signed a deal in October 2015 to jointly build an oil refinery with a processing capacity of 300,000 barrels per day in the South American country.

Deputy Oil Minister Abbas Kazemi said the refinery would entirely use Iranian oil as feedstock, allowing for long-term supply of the country's crude to Brazil.

Construction of refineries abroad is Iran’s another post-sanctions policy.

Brazil is also interested in buying Iran's liquefied petroleum gas, or LPG, Oil Minister Bijan Namdar Zanganeh had said earlier.  It is among the countries, including Spain, Poland and France, to discuss LPG trade with Tehran.