2mn barrel of heavy crude oil to be offered at IRENEX on Tuesday

TEHRAN, May 26 (MNA) – National Iranian Oil Company (NIOC) is due to offer a two-million-barrel cargo of heavy crude oil to domestic buyers through the international ring of Energy Stock Market (IRENEX), on Tuesday.

As reported, two million barrels of light crude oil were offered at IRENEX last Tuesday.

One of the main strategies that Iran chose to execute to help its oil exports afloat has been trying new ways to diversify the mechanism of oil sales, one of which is offering oil at the country’s stock market.

Iranian Oil minister Bijan Zanganeh announced on Saturday that in line with improving monetary transparency, instructions for offering oil at IRENEX have been prepared.

“Regarding that offering oil and condensates at IRENEX are included in this years’ regulations, explicit instructions for the issue have been prepared by the oil ministry,” Zanganeh said.

“The instructions describe issues such as exact price setting methods,” he added.

The minister expressed confidence that the provided instructions will allow the buyers an acceptable level of predictability and transparency via providing data about the prices, the sales and also the made purchases.

Since the US withdrew from Iran’s nuclear pact in May 2018, vowing to drive Iran's oil exports down to zero, the Islamic Republic has been taking various measures to counter the US actions and to keep its oil exports levels as high as possible.

NIOC offered crude oil at IRENEX first on October 28, 2018, just a few days before new US sanctions on Iran’s petroleum sector took effect (November 4). In the first round, NIOC could sell some 280,000 barrels of crude oil at $74.85 per barrel. With the daily supply amount of one million barrels, the market wrapped up by selling eight 35,000-barrel-cargos of oil on the day.

Now, offering heavy crude oil at IRENEX can open a new chapter for the exports of Iranian oil as this type of crude is of high significance both technically and commercially, because it accounts for a huge amount of production in the refineries. Many refineries throughout the world, especially in the South Asian region, are willing to use this type of crude, which is priced much lower compared to the light oil.

The United States told buyers of Iranian oil to stop purchases by May 1 or face sanctions, ending six months of waivers that had allowed Iran's biggest customers to import limited volumes.

On May 5, Iranian Deputy Oil Minister Amir Hossein Zamaninia announced that Iran has mobilized all its resources to sell oil in a 'grey market', to circumvent illegitimate US sanctions against the country.

“We sell oil at a recently discovered grey market using all of our capacities,” he said, “This is not smuggling. This is countering sanctions which we do not see as just or legitimate."

Grey market is where the products and goods are bought and sold outside and not within the original manufacturers authorized distribution channel.

HJ/FNA 13980304000141

News Code 145748

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