Oil Trade on Iran Energy Exchange in Rials

EghtesadOnline: The Supreme Council of Economic Coordination – a special body comprising heads of the three branches of government – has agreed to the total settlement in rials of payments for crude oil sales on the Iran Energy Exchange.

News ID: ۷۴۶۳۶۷

23 December 2018

Mohammad Reza Pour-Ebrahimi, chairman of the Majlis  Economic Commission said the motion was proposed by the Oil Ministry and was approved by the SCEC to facilitate crude oil export on IRENEX.

“It was agreed to settle oil payments entirely in rials…. This is a new incentive created for buyers on IRENEX”, he told state TV.

As per earlier announcements, 20% of crude oil sales were in rial and the remaining in foreign currency, Financial Tribune reported.

Crude oil buyers earlier this month discussed their problems about settling oil payments and demanded alternative mechanisms to pay for crude cargos given the existing US restrictions on money transfers.

“Offering crude oil on IRENEX is a new experience and we should allow it to gain traction over time,” the senior lawmaker said.

He said 3 million barrels – up from one million barrels in the past round – will be offered in the next phase and the decision about the volume of offers in future sessions  will be made based on the pattern of sales in the market.

In the first sale on October 28, eight cargos of 35,000 barrels at $74.85 per barrel, were purchased on the stock market by three brokerages.

During the second offering of crude on IRENEX in November, traders purchased all the 700,000 barrels of Iranian light crude on offer.

Several attempts had been made in the past to sell crude oil on the stock market in Tehran and involve the private sector and international stakeholders in the heavily state-controlled oil sector -- the lifeblood of Iran’s economy.

But with looming disruptions in Iran's oil exports due to the stringent US restrictions, it was finally decided to go ahead with the long-delayed move.