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Iran is planning to raise the oil swap capacity by more than 12 times to 1.5 million barrels a day.
Iran is planning to raise the oil swap capacity by more than 12 times to 1.5 million barrels a day.

Iran Ready to Restart Caspian Oil Swap Deals

Iran was forced to pay nearly $10 million in compensation and court costs for unilaterally halting oil swap operations six years ago

Iran Ready to Restart Caspian Oil Swap Deals

Iran is closer than ever to resuming oil swaps with Caspian Sea littoral states after the former Iranian government unilaterally ended swap operations in the region in 2010 in a controversial decision.
"We are ready to swap 120,000 barrels of oil per day at the behest of the Oil Ministry," Hamidreza Shahdoust, the head of North Oil Terminals Company, was quoted as saying by Shana on Wednesday.
He added that Iran is planning to raise the oil swap capacity by more than 12 times to 1.5 million barrels a day by increasing the number of oil terminals from 3 to 17 at present.
"We will receive crude oil in the north for domestic consumption and export the equivalent from the Persian Gulf in the south," Shahdoust added.
One of the routes to carry crude inside the country is a pipeline that connects Neka Oil Terminal in Mazandaran Province to Tehran Oil Refinery. The pipeline, which is ready for operations, has the capacity to transfer 500,000 bpd of crude.
Neka used to be Iran's most active terminal for conducting the oil swap in the Caspian region.
The government of President Hassan Rouhani is pushing to resume swap operations with northern neighbors to make up for a six-year hiatus.
In 2010, then oil minister, Masoud Mirkazemi, said Iran had to stop buying crude "under the name of swap deals" in what he had described as "national treason".
But the move had political and economic implications and was deemed ill-considered by some officials and analysts.

  $10m Compensation
According to Mahmoud Astaneh, a member of the board of Naftiran Intertrade Company (NICO), Iran was forced to pay nearly $10 million in compensation and court costs for unilaterally halting the swap operations.
An affiliate of state-run National Iranian Oil Company, NICO has several international offices and handles some of Iran's crude export operations.
According to reports, Iran received $1 in transit costs for each barrel of oil under a swap contract with four international companies.
Iran once swapped as much as 130,000 barrels per day, "but we lost our position in the region and our competitors in the Caspian region attracted our customers", Astaneh said.
Officials say it is economically viable for Iran's northern neighbors, such as Armenia and Azerbaijan, to use Iran’s vast lands for swapping hydrocarbon materials.
In May, deputy oil minister for international affairs, Amirhossein Zamaninia, said Iran was in preliminary negotiations with Turkmenistan, Russia and Kazakhstan on oil and gas swap, urging Iranian private companies to participate. Iran has reportedly been engaged in swap negotiations with Russia’s Rosneft and the State Oil Company of Azerbaijan Republic after reaching a historic agreement with six world powers on its nuclear program in July 2015.
A senior official had also said Iran is ready to start swapping 300 million cubic meters of natural gas per day from Russia in the north with those of southern terminals in the Persian Gulf.

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