Oil Company Expanding Shipments to Europe

EghtesadOnline: Tehran has set its sights on raising crude oil export to Europe in 2017 as the number of customers willing to buy from Iran is on the rise, head of the National Iranian Oil Company said.

News ID: ۷۳۹۷۶۹

12 February 2017

"The NIOC has increased exports to European customers to 700,000 barrels per day. However, we plan to increase it to the pre-sanctions peak of 800,000 bpd," Ali Kardor was quoted as saying by Tasnim News Agency on Saturday.

According to the official, European companies, including Russia's Lukoil, Spanish refiner Cepsa, Royal Dutch Shell, Hungary’s MOL and Turkey's Tupras now import more than 700,000 bpd of Iranian oil combined.

Iran used to sell 800,000 bpd to European refiners in Italy, Spain, Greece, Romania, France, the Netherlands and Poland in the pre-sanctions period, according to Kardor.

"Oil shipments to Lukoil, Cepsa, Italy's Saras and Greece's largest refiner Hellenic Petroleum are underway and more oil export deals are to be finalized with European buyers in 2017," Financial Tribune quoted him as saying.

Once the second-biggest producer of the Organization of Petroleum Exporting Countries, Iran slipped to fifth place under the international sanctions regime. It is now third behind Saudi Arabia and Iraq which produce around 10 million bpd and 4.5 million bpd respectively. The lion's share of exports during the sanctions was made to a handful of countries including India, Turkey and South Korea under temporary exemptions, while Europe-bound shipments came to a standstill.

The government says it has plans to step up crude production from around 4 million at present to 5.7 million bpd within five years, including 1 million barrels of gas condensates.

"We are keen on expanding our presence in the international market and speeding up negotiations with foreign oil companies," said the NIOC chief.

NITC Revival

Sirous Kianersi, the chief executive of National Iranian Tanker Company, said last month that the easing of international sanctions gave a new lease of life to NITC's tanker movements which were significantly curtailed when economic and trade restrictions were tightened in 2012.

"Issues pertaining to global insurance, classification, flag requirements and certifications for Iranian tankers have been removed," he said.

According to reports, a NITC-owned tanker that was leased to a major Spanish company recently docked at the country's Port of Algeciras, marking the first time that a vessel owned by NITC docked at a terminal in Europe following the lifting of sanctions a year ago.

Sources also say that two NITC-owned very large crude carriers are headed toward the Dutch port of Rotterdam last month to offload 4 million barrels of Iranian crude.

In 2012, the EU banned imports of Iranian crude by its member countries and also the provision of EU-linked insurance, including protection and indemnity cover for any shipments of Iranian crude, regardless of destination.

Despite the easing of sanctions, NITC tankers reportedly faced restrictions in berthing at European oil terminals until recently and foreign vessels carried Iran's crude to Europe.

During the sanctions, 90% of Iran's oil, or almost 1 million barrels per day, were shipped by Iranian tankers.