No Buyers in Latest Oil Offer via IRENEX

EghtesadOnline: As per its earlier announcement, the National Iranian Oil Company on Monday offered one million barrels of light crude oil on the Iran Energy Exchange (IRENEX) but there were no customers.

News ID: ۷۴۶۸۴۹

05 March 2019

At the sixth oil offer on IRENEX, the seller set the base price at $59.63 per barrel and offered the commodity in cargos of 35,000 barrels each. Buyers were required to purchase at least one cargo.

This is not the first time that oil on IRENEX had no buyers. NIOC didn’t find buyers for its oil during third and fourth rounds too, despite easing the purchasing conditions.

Interested buyers are required to pay 6% of the order value in rials two hours before the beginning of trading time. Moreover, the payment settlement period has been extended from 60 to 90 days, according to Financial Tribune.

Payments can be settled both in rials and foreign currency and the exchange rate is based on open market rates reported by SANA website.

Offering crude oil on stock market is part of efforts to involve the private sector and international companies in the oil industry which is heavily monopolized by the government.

Role of the private sector in oil sale has gained renewed importance, particularly after the new US sanctions which, among other things, has hit the oil industry, aiming to paralyze the economy.

While debating next year’s (March 2019-20) budget in parliament, MPs voted on a proposal to oblige the Oil Ministry to offer on a monthly basis 2 million barrels of light crude on IRENEX.

According to the NIOC website, since the inception of oil offers on IRENEX, the company has managed to sell an aggregate 1,015,000 barrels of crude oil on IRENEX.  Despite tougher purchasing conditions, NIOC made good sales in the first and second rounds, trading 280,000 and 700,000 barrels, respectively.

The company sold 35,000 barrels in the previous round.  The cargo was sold at $52.25 per barrel, cheaper than the $56.81 mentioned in the original NIOC notice.