70,000 Barrels of Heavy Crude Sold on Iran Energy Exchange

EghtesadOnline: In a new round of oil offer on the Iran Energy Exchange, the Iranian National Oil Company sold 70,000 barrels of heavy crude on Tuesday.

News ID: ۷۴۷۲۰۱

01 May 2019

The company had offered 1 million barrels of heavy crude in cargos of 35,000 barrels each and sold two cargos at $63.51/barrel.

Buyers are required to pay 6% of the order value in rials two hours before the beginning of trading time. They settle the payment 90 days after trade.

Payments can be settled both in rials and foreign currency and the exchange rate is based on open market rates, according to Financial Tribune.

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 a government monoploy.

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

Lawmakers last year obliged the Oil Ministry to offer crude oil on a regular basis on IRENEX. Accordingly, the NIOC offers 2 million barrels of oil on IRENEX on a monthly basis.

According to the NIOC website, after the oil sales via IRENEX started, the company has sold 1 million barrels plus of light crude. Tuesday’s trade was the first cargo of heavy crude sold via IRENEX.

In a bid to ease conditions for potential buyers of oil in the capital market, the CEO of IRENEX Ali Hosseini told Financial Tribune earlier that IRENEX has strived to do away with formalities in payment settlements. Settlements are now possible outside a securities depository.

“If the two sides agree, they can fully do away with prepayments. The parties can also take a step further and eliminate the need for bank guarantees.”