New Crude Offer on IRENEX Stalls

EghtesadOnline: A new round of crude oil offer on the Iran Energy Exchange ended Tuesday without any trade. The offer was the eighth of its kind and the first in the new fiscal that started on March 21.

News ID: ۷۴۷۰۲۰

10 April 2019

According to the IRENEX website, as in the previous rounds, one million barrels of light crude oil was on offer by the National Iranian Oil Company at a base price of  $63.36 per barrel.

As for pricing procedures, the NIOC notice says the base price of each barrel of oil will be declared by NIOC in USD and will be as per the average Brent quotations during 10 international business days before the date of offer announcement.

Oil was offered in cargos of 35,000 barrels each and buyers were required to purchase minimum one cargo. Buyers could receive the cargo either at Kharg Island terminal in the Persian Gulf or Tabriz Refinery, if they requested a land delivery, a facility lacking in the first six offers, Financial Tribune reported.

Both domestic and foreign companies were allowed to place orders for crude oil after depositing 6% of the order value two hours before the trading began at 2:30 pm.

Offering crude oil on the stock market is part of efforts to involve the private sector and international companies in the oil industry, which has long been completely under government control.

As part of the current fiscal budget, lawmakers passed a proposal to oblige the Oil Ministry to offer on a monthly basis 2 million barrels of light crude on IRENEX.

However, the move did not produce the desired results as during seven rounds of offer in the previous fiscal, the NIOC hardly managed to sell 1.015 million barrels of crude on IRENEX.