Iran Signs Spot Contracts With Shell, BP

The National Iranian Oil Company has signed new spot oil export contracts with BP and the Anglo-Dutch Royal Dutch Shell to provide them with oil and gas condensates, director for international affairs at NIOC said on Wednesday.

“NIOC sold 130,000 tons of crude to Shell on July 8 that was unloaded in Rotterdam  and  more cargos are to be sold to the two companies,” Mohsen Qamsari was quoted as saying by Mehr News Agency.

A spot contract is a deal for buying or selling a commodity for settlement (payment and delivery) on the spot date, which is normally two business days after the trade date. A spot contract is in contrast with a forward contract where terms are agreed now but delivery and payment will occur at a future date.

Commenting on the resumption of oil sales to Shell and BP, the official added that negotiations are underway to sign long-term contracts with the British oil giants. He was optimistic about the outcome of the talks.

“There are no limitations to increase oil exports,” Qamsari said, noting that in 2016, Iran sold  2 million barrels of crude oil everyday.

According to Qamsari, NIOC has signed a short-term contract with Italy’s oil giant Eni to sell crude as it seeks to revive the agreement it had with the Italian company before the imposition of international sanctions.

On resuming oil exports to customers in Asia and Africa, Qamsari said Sri Lanka is in talks with the NIOC to resume crude imports and South Africa is expected to follow suit.

Asked about selling oil to American refineries in South Africa, including those owned by Chevron Corporation, he said as per Iranian law there is no restriction on doing business with US companies.

Iran’s crude oil production is now close to 4 million barrels per day, almost the same as  before sanctions were imposed over the nuclear dispute.