Delayed Oil Supply at Bourse

Delayed Oil Supply at Bourse
Delayed Oil Supply at Bourse

The 100,000 barrels of oil due to be supplied at the energy bourse in October will be made available next week if  a final agreement on price and payment is reached, deputy oil minister said Tuesday.

Price and payment issues have been discussed at several meetings between the oil ministry and the bourse, Seyed Mohsen Ghamsari was quoted by IRNA as saying.

"The overall framework has been established for supply of crude at the bourse."

Oil prices at the energy bourse will be based on the export price of Iranian crude, as the oil is expected to be traded by the private sector outside the country, Ghamsari said.

Iran's oil ministry is pursuing a different policy by offering the oil for export only. The oil offered at the bourse has so far been aimed at the domestic market, with an internal delivery point. The new offering, however, requires buyers to have their tankers at export locations for delivery, with the oil to be sold in foreign markets.

The offer for the 100,000 barrels will be free on board (FOB) and interested buyers, including international firms, will have to pay in local currency.

The final decision on price and payment is expected to be made by the end of the week.

"It is expected that the new delivery could get a cold shoulder from buyers due to high price, although refineries will be offered the price as offered in the bourse," Ghamsari said in October, ruling out any possibility of lowering oil prices.

Exporting oil at the highest price and maximum volume, and the transfer of revenues to the Central Bank of Iran (CBI) and treasury are among the responsibilities of the international affairs department of the oil ministry.