Iran Keen to Resume Oil Trade With Hungary

Iran Keen to Resume Oil Trade With HungaryIran Keen to Resume Oil Trade With Hungary

Hungary's largest oil and gas company MOL Group is an important part of Iran's plan for strengthening its foothold in the European crude market, the director of international affairs at the National Iranian Oil Company said.

The statement comes fresh off a report last week that the state-owned NIOC cannot meet MOL's demand for light crude.

"We are keen to use every opportunity to return to the market … in rebuilding trade ties. MOL, as one of the old customers of NIOC, enjoys priority," Mohsen Qamsari was also quoted by Shana as saying.

Qamsari said the two sides are in months-long negotiations, hoping that the first shipments to the Central European nation will follow through in the near future.

MOL resumed talks with NIOC shortly after sanctions against Iran were lifted in January. Foreign media reported in February that MOL, along with several major oil and gas firms, including the Royal Dutch Shell and Tupras of Switzerland, were in talks to join the country's growing list of European customers.

But the Budapest-based firm, which is the second most valuable company in Central and Eastern Europe, wants to secure Iran's crude supply in a long-term contract.

MOL is interested in receiving Iran's oil through the Trans Adriatic Pipeline, a pipeline that starts from Azerbaijan and stretches from western Turkey through Greece, Albania and then across the Adriatic Sea to Italy.

TAP, which will connect the Trans Anatolian Natural Gas Pipeline (TANAP) once completed, will allow European countries to diversify their energy sources and reduce dependence on Russia as the continent's main oil and gas provider. The pipeline's construction started last month.

In a statement last week, Qamsari said MOL had called for importing 40,000 barrels of light oil per day from Iran, but the country is low on light crude supplies and most of its shipments are made up of Iran Heavy, one of its main oil grades.

MOL operates refineries in Hungary, Slovakia and Croatia. It also has exploration and production assets in the North Sea and countries, including Pakistan and Iraq.

The US and EU sanctions on Iran's nuclear program curtailed its oil output, but Iran has ramped up its production and export sooner than analysts had expected.

Iran is now pumping more than 3.8 million barrels per day, according to government figures. It means OPEC's third-largest producer is within its pre-sanctions production ballpark, as exports are almost level with the 2.5 million barrels it exported before the tightening of sanctions in 2011 and 2012.

Officials say European buyers are taking in around 600,000 bpd of Iranian crude. Total, Eni, Greece's Hellenic Petroleum and Lukoil are among major customers of Iran's oil in the post-sanctions period.