NIOC Looking for Trade Expansion via Iran Energy Exchange

EghtesadOnline: Following two rounds of sea delivery of oil products offered on the Iran Energy Exchange, the National Iranian Oil Company has said that it wants to expand such offers.

News ID: ۷۴۹۳۸۴

07 January 2020

According to Amirhossein Tebianian, NIOC’s representative in charge of offering petroleum products on IRENEX, there are plans to assign NIOC the task of handling all oil product offers via sea.

In two rounds of diesel offer via the energy bourse, the company sold 533,000 barrels of diesel since the beginning of the current calendar month on December 22, Financial Tribune reported.

In the first offer on Dec. 25, NIOC sold 250,000 barrels and in the second on Jan. 1, a cargo of 333,000 barrels was delivered to buyers, IRNA quoted him as saying.

The official did not mention the value of cargos but said the low sulfur diesel was sold $8.7 lower than Persian Gulf quotation for 500 PPM sulfur diesel.

Apart from diesel, the NIOC has plans to offer other oil products via sea, Tebianian said, adding that mazut would be the next candidate.

According to the official, National Iranian Oil Refining and Distribution Company will be in charge of land delivery of petroleum products.

The Oil Ministry in mid-summer started offering oil products, namely gasoline and diesel, on IRENEX after the initiative to sell crude oil on the bourse flopped.

With dwindling oil export revenues due to the new US economic sanctions, selling oil byproducts via IRENEX has helped the oil industry to some extent.

The CEO of IRENEX Ali Hosseini said earlier that selling gasoline on the energy bourse generates on average $200 million a week.

Revenue Data

According to a report by the Economic Reviews Department of Tehran Chamber of Commerce, Industries, Mines and Agriculture, trading in different energy carriers on IRENEX has generated $519 million for the country during seven months from the beginning of the current calendar year till mid-October.

Diesel and gasoline had the largest share of trading -- 43% and 30% respectively. During the period under review, 0.47 million tons of diesel worth $225 million was traded at IRENEX with an average price of $478 per ton.

Transactions mainly involved diesel, gasoline, liquefied natural gas, raffinate, heavy crude oil, solvent 402 (white spirit), solvent 503, heavy oil cracking and heavy naphtha, among others.

This is while a similar move by the government to offer crude oil has failed to deliver the desired results despite the fact that those in charge sweetened the sale terms several times.

Based on the latest adjustments for such trade, crude oil and gas condensates will be offered at discounted rates.  According to Tebianian, each barrel of light crude oil will be offered $7 lower than Brent crude prices for FOB delivery.

Heavy crude will be priced $8.5 lower than Brent and $6 discount will be offered to buyers of gas condensates, subject to prices in Dubai’s energy market.

As per IRENEX data, the NIOC was able to sell 1.1 million barrels of crude oil on the market after the program started in October 2018.