Iran Energy Exchange to Start Third Round of Oil Deals

EghtesadOnline: The third round of crude oil sales will be held on Iran Energy Exchange on January 21, a National Iranian Oil Company official said.

News ID: ۷۴۶۴۹۷

15 January 2019

Saeed Khoshroo, deputy for NIOC international affairs said Monday that in the latest round of crude sale on stock market the Oil Ministry will offer 1 million barrels of light crude oil on IRENEX.  The base price is $52.42 a barrel and oil will be offered in cargos of 35,000 barrels each.

In the first round of crude sales in October, one million barrels were offered in the market but only 280,000 barrels sold at $74.85 a barrel. In the second round in November sales increased to 700,000 barrels at $64.97 per barrel.

Several attempts had been made in the past to sell crude on the Tehran Stock Market and involve the private sector and international stakeholders in the heavily state-controlled oil sector, Financial Tribune reported.

But with looming disruptions in oil exports due to unilateral US restrictions, the government decided to go ahead with oil trade via the stock market.

Khoshroo said in the new round buyers can pay both in foreign exchange or in rials at rates announced by SANA (a system operating under the supervision of central bank that records average exchange rates from across the exchange bureaus).

The settlement period has also been extended from 60 days in the previous rounds to 90 days.

Supreme Council Mandate

Pointing to permits granted by the heads of three branches of the government to sell 3 million barrel crude oil in the IRENEX, he said, “We have plans to sell one million barrels at this stage and volumes to be sold in the later stages will be subject to the outcome of this round.”

The Supreme Council of Economic Coordination – a special body comprising heads of the three branches government – agreed in December to the total settlement in rials of payments for crude oil sales via IRENEX.

As per earlier announcements, 20% of the oil sales were to be settled in rials and the remaining in foreign currencies.

According to the Oil Ministry website, the initiative is in line with the tenets of Resistance Economy that  advocates variety in crude export methods and tapping private sector potential in the export of crude oil.

A member of the Majlis Joint Commission said members of the commission approved a decision which binds the Oil Ministry to offer a minimum of two million barrels of light crude oil, minimum two million barrels of heavy crude oil, and one million barrels of natural gas condensate on IRENX on a monthly basis  from April.

Ali-Asghar Yousefnezhad said the commodity is expected to be offered regularly and the payments can settled in rials. The measure has been approved as part of ongoing deliberations related to the 2019-20 budget bill.

“The Oil Ministry is required to present a performance report every three months to the Majlis Energy Commission,”  IRNA quoted the MP as saying.